Exhibit 10.1
REVISED AND RESTATED
EMPLOYMENT AGREEMENT
Agreement, made as of December 17, 1999, by and between Spectra Science
Corporation, a Delaware corporation (the "Company") and Xxxxx Xxxxxxx (the
"Executive").
Whereas, the Company entered into an Employment Agreement, dated August
23, 1996, with the Executive;
Whereas, that Employment Agreement was purportedly revised and restated
pursuant to a document dated December 17, 1999;
Whereas, that document did not embody the agreement of the parties as
of that date and contained other scrivener's errors; and
Whereas, the parties wish to set forth their understanding and
agreement regarding the employment of the Executive by the Company.
Now therefore, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Employment Services.
During the Employment Period (as defined herein), the Executive will
serve as the Company's Chief Executive Officer and Chief Technical Officer, and
will have such duties and responsibilities as would normally attach to those
positions, including such duties and responsibilities as are customary among
persons employed in similar capacities for similar companies, subject always to
the authority of the Board of Directors of the Company (the "Board"). The
Executive will faithfully and diligently carry out his duties and
responsibilities and comply with all of the reasonable and lawful directives of
the Board, to which the Executive will report. The Executive will, if so
elected, serve as a director of the Company and an officer or director of any
subsidiary or affiliate of the Company without compensation in addition to that
provided in this Agreement. For purposes of this Agreement, an "affiliate" of
the Company means any corporation, limited partnership, limited liability
company or other entity engaged in the same business as the Company, or a
related business, and which is controlled by or is under common control with the
Company.
Section 2. Term.
The Company shall employ the Executive, and the Executive accepts such
employment, continuing from the date first above written and ending at such time
as this Agreement has terminated under the provisions of Section 5 hereof (the
"Employment Period").
Section 3. Performance.
During the Employment Period, the Executive shall devote his best
efforts and all of his business time and attention (except for vacation periods
and reasonable periods of illness or other incapacity) to the business of the
Company and its affiliates and will not engage in consulting work or in any
other trade or business for his own account or for or on behalf of any other
person, firm or corporation without the written consent of the Board of
Directors in each case, which shall not be granted if any such activity, in the
opinion of the Board of Directors, competes, conflicts or interferes with the
performance of his duties hereunder in any material way. The Executive shall
accept such office or offices to which he may be elected by the Board of
Directors of the Company. The Executive represents that he knows of no special
health factors which would adversely affect his insurability, and he will assist
the Company in all reasonable respects should the Company attempt to obtain a
"key man" life insurance policy covering the Executive.
Section 4. Compensation and Benefits.
(a) Salary. For services to the Company rendered by the
Executive in any capacity during the Employment Period, including
without limitation, services as a manager, officer, director or member
of any committee of the Company or of any subsidiary, affiliate or
division thereof, the Company will pay or cause to be paid to the
Executive a base salary at the rate of not less than $250,000 per annum
(or such higher amount as the Compensation Committee of the Board may
establish from time to time). The Executive's base salary for any
partial year will be prorated based upon the number of days elapsed in
such year. The Executive's base salary will be payable periodically in
accordance with the Company's customary payroll practices for its
executives. The term "base salary" shall not include any payment or
other benefit which is denominated as or is in the nature of a bonus,
incentive payment, profit-sharing payment, performance share award,
stock option, stock appreciation right, retirement or pension accrual,
insurance benefit, other fringe benefit or expense allowance, whether
or not taxable to the Executive as income.
(b) Annual Performance Bonus. The Executive will be eligible to
receive an annual performance bonus consisting of up to $75,000 in
cash, and options (the "Annual Performance Options") to purchase up to
75,000 shares of Common Stock of the Company (with the number of shares
referenced herein being subject to adjustment from time to time to
reflect stock splits, combinations, recapitalization and the like),
under the Company's current Stock Option Plan as amended from time to
time ("Option Plan"), in such amounts as to cash and options as may be
determined by the Compensation Committee of the Board in its sole and
absolute discretion. The Compensation Committee shall consider and make
a bonus determination not later than 60 days after the end of each
contract year during the Employment Period. Bonus awards shall be based
upon superior performance by the Executive as measured against
objective and reasonable criteria mutually agreed and approved in
advance by the Executive, the Board of Directors and the Compensation
Committee, which criteria may include but shall not be limited to
considerations such as those set forth in Schedule 1 to this Agreement.
Notwithstanding the foregoing, the Executive shall be entitled to the
full Annual Performance Bonus for any year in which a Qualifying Sale,
a Qualifying IPO, or a Qualifying Spin-out (as those terms are defined
in Subsection (f) below) is closed. The
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parties intend that the Annual Performance Options qualify as incentive
stock options under relevant provisions of the Internal Revenue Code
("IRC"), and that the option exercise price be equal to the fair market
value of a share of Common Stock of the Company on the date of issuance
of the option, as determined by the Board of Directors of the
Corporation in its sole discretion, unless a higher exercise price is
required, by reason of the Executive's particular status or
circumstances, in order for the option to qualify as an incentive
option under the IRC as then in effect.
(c) Other Option Grants.
(1) Grant in Lieu of Past Bonus Entitlements. In lieu of
any past bonus awards for which the Executive was entitled to be
considered, the Executive is hereby granted an incentive stock option
("Additional Incentive Option") under the Option Plan to purchase
200,000 shares of Common Stock of the Company (the "Additional Option
Shares") at $.50 per share. The Additional Incentive Option may only be
exercised to the extent that it is vested. The Additional Incentive
Option shall vest and become exercisable with respect to 20% of the
Additional Option Shares on the last day of each year during the
five-year period commencing on the date of this Agreement. Any unvested
Additional Incentive Options shall vest and be immediately exercisable
upon the occurrence of a Qualifying Sale, Qualifying IPO or Qualifying
Spinout as defined below.
(2) Nonqualified Stock Options. The Executive is hereby
granted a non-qualified option (the "NSO Option") to purchase 550,000
shares of the Company's Common Stock, at an exercise price of $.50 per
share. The NSO Option may only be exercised to the extent that it is
vested. If the Executive is employed by the Company on December 16,
2004, NSO Option shall fully vest and become exercisable. Vesting will,
however, be accelerated upon the closing of an IPO or Sale (or, as set
forth below, in connection with certain transactions involving Spinout
companies), but only as to such number of NSO Options determined as
follows:
[This space intentionally left blank.]
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If the overall value of the Company (the "Company Valuation"), as
determined in the good faith judgment of the Board of Directors
with principal reference to the terms of the IPO or Sale, is
greater than the number set forth in the left hand column below,
the number of NSO Options set forth in the right hand column
opposite that number shall be deemed to have vested and be
exercisable, and any balance of the NSO Options shall vest on
December 16, 2004 (if the Executive is employed by the Company at
that date):
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Company Valuation Aggregate Vested NSO Options
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$100,000,000 100,000 options vested
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150,000,000 225,000 options vested
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200,000,000 375,000 options vested
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More than $250,000,000 550,000 options vested
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If, during the term of this Agreement and prior to an IPO or Sale of
the Company, the Company shall engage in a Spinout transaction and the
subsidiary or affiliated Company which was the subject of the Spinout
should thereafter (but prior to an IPO or Sale of the Company) be sold
or should close an underwritten initial public offering of its Common
Stock, then: (a) the Board of Directors shall determine in good faith
the value of the Company's interest in the Spinout (the "Spinout
Value") at the time of the sale or initial public offering; and (b)
that Spinout Value shall be added to the Spinout Value determined with
respect to any other subsequent Spinout. The Company Valuation for
purposes of the chart set forth above and the vesting of NSO Options
pursuant thereto shall include any Spinout Values, and NSO Options
shall be vested from time to time prior to an IPO or Sale of the
Company as and if aggregate Spinout Values equal or exceed the
thresholds set forth in the left-hand column of the chart.
(d) Split Dollar Life Insurance. If the Executive is employed
by the Company under this Agreement immediately following the closing
of the Company's IPO (as defined below), the Executive may obtain at
that time, and the Company shall pay the premiums as set forth below
on, a so-called "split dollar" whole life insurance policy (the
"Policy") covering the Executive, with an initial coverage amount of
death benefit not in excess of $2,000,000 which Policy shall be owned
by the Executive. The Policy may be payable to a beneficiary or
beneficiaries of the Executive's choosing. The Policy terms shall
provide for fully-paid coverage with ten (10) guaranteed level annual
premiums. Dividends will be applied to the purchase of paid-up
additions. The Company will pay each annual premium (not to exceed
$110,000 per year) which comes due during the Employment Period, less
the cost of the lower of (i) the premium for a comparable amount of
nonconvertible term life insurance or (ii) the rates set forth in
Internal Revenue Service Table P.S. 58, in either case, the payment of
which shall be the responsibility of the Executive. If the annual
premium payable by the Company for the Policy exceeds $110,000, the
Executive may elect to pay the excess premium or reduce the coverage
amount so that the Company's premium will not exceed $110,000. If the
Executive is uninsurable at the time the Policy would be purchased, the
Company's obligation to pay premiums hereunder shall be void. The
Company shall be entitled to repayment of one hundred (100%) percent of
the total amount of premiums paid by it upon the Executive's death,
surrender or termination of the Policy, or the expiration of
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the Company's obligation to pay the premiums hereunder, whichever first
occurs. The Policy will be collaterally assigned to and held by the
Company as security until full reimbursement of premiums to it has been
made. The collateral assignment shall be in a form reasonably
acceptable to the Company. While the collateral assignment is in
effect, the Executive shall not withdraw or borrow against the value of
the Policy any amount which would reduce the aggregate surrender value
of the Policy to less than the amount of the premiums then paid by the
Company. The Company's obligation to continue payment of premiums shall
terminate upon its termination of the Executive's employment with the
Company for Cause, or upon termination by the Executive of his
employment other than as a result of a material breach of this
Agreement by the Company or in connection with a Deemed Termination
Event (as set forth in Section 5(b) hereof). In the event that the
Executive's employment hereunder is terminated by the Company without
Cause, or by the Executive in connection with a Deemed Termination
Event or because of material breach hereof by the Company, and the
Policy is in place on the date of termination, the Company shall prepay
to the Policy issuer the balance of any guaranteed premiums at the net
present value thereof, and will be entitled to retain the Policy as
collateral until reimbursement in full as provided herein has been
made.
(e) Other Benefits. In addition to the compensation described
in this Section 4, and such other amounts, not constituting base
salary, as may be provided to the Executive from time to time by the
Board, the Executive will be entitled during the Employment Period to
participate in any retirement plans, bonus plans, welfare benefit plans
and other employee benefit plans of the Company that may be in effect
from time to time with respect to executives of the Company generally,
to the extent the Executive is eligible under the terms of those plans.
(f) Definitions. An "IPO" shall mean the initial underwritten
public offering and sale of the Company's Common Stock registered under
the Securities Act of 1933. A "Sale" shall mean the sale of all or
substantially all of the Company's assets for cash or securities (other
than in connection with a Spinout, or pursuant to a license of the
Company's technology not undertaken as part of a sale of all or
substantially all of the Company's other assets), or a merger or
combination with or into another entity which results in more than 50%
of the ownership interests of the Company being owned by persons or
entities who were not shareholders of the Company immediately prior to
closing of the transaction. A "Spinout" shall mean the creation by the
Company of a subsidiary or affiliated company, to which some portion of
the Company's assets are transferred, with the intention that the
subsidiary or affiliate company will be financed and operated
separately from the Company although owned in part by the Company
and/or its Shareholders. A "Qualified" IPO, Sale, or Spinout shall be
any such transaction in which the holders of the Company's Preferred
Stock have, in the aggregate, in the opinion of a majority of the Board
of Directors of the Company (Xx. Xxxxxxx abstaining), received on
account of their equity interest in the Company, in cash or marketable
securities, an amount equal to their investment in the Company plus a
return on that investment at least equal to the average annual returns
realized on an investment in the S&P 500 over the three year period
ending on the closing date of the relevant IPO, Sale or Spinout.
(g) Cashless Exercise. The terms of all of the options issued
to the Executive by the Company pursuant to this Agreement shall permit
the Executive to
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exercise the options in whole or in part by assigning and surrendering
to the Company, for no additional consideration, shares of Common Stock
of the Company which have been owned by the Executive for at least six
months prior to the date of assignment, the fair market value of those
shares (as determined in good faith by the Board of Directors) shall be
credited by the Company against payment of the applicable option
exercise price.
(h) Stock in Spinout Companies. Prior to the initiation of any
Spinout, the Company's Board of Directors will consider what option or
other equity compensation arrangements covering Common Stock of the
Spinout company should be granted or put in place in favor of the
Executive and any other employees of the Company who may be involved
initially with the business of the Spinout company. The Company will
use its best efforts to implement any such arrangements recommended by
the Board of Directors. The Company will also attempt to ensure that
any option shares thereafter issued by the Spinout company to the
Executive after the Spinout has become a reporting company under the
Securities and Exchange Act of 1934, to the extent that the sale of
those shares is not covered by an effective registration statement on
Form S-8 (or its then equivalent), will be covered by "piggy back"
registration rights no less favorable to the Executive than similar
rights granted to the investors in the Spinout company's last private
financing prior to its initial public offering.
(i) Deferred Compensation. The Company shall, for a period of
ten (10) years commencing immediately following the closing of the
Company's IPO (as defined herein) and continuing thereafter from year
to year, accrue the sum of $55,000 annually, as deferred compensation
for the benefit of the Executive (the "Deferred Compensation"). The
accrual shall be effective as of the first day of each twelve (12)
month period commencing with the closing of the Company's IPO and each
anniversary of said date. The Company shall not be obligated to set
aside any funds or assets of the Company for the purpose of paying said
Deferred Compensation nor shall any interest accrue on the amount of
Deferred Compensation accrued in each such twelve (12) month period. If
not paid prior thereto, the Company shall pay the total amount of the
Deferred Compensation to the Executive at the end of the tenth (10th)
such twelve (12) month period following the Company's IPO. If not paid
prior thereto, the Company shall pay the then accrued Deferred
Compensation to the beneficiary(ies) of the Executive in the event of
the death of the Executive. If not paid prior thereto, in the event
that the Executive's employment hereunder is terminated by the Company
without Cause, or by the Executive in connection with a Deemed
Termination Event or because of material breach hereof by the Company,
the remaining amount of the Deferred Compensation that would have
accrued for the benefit of the Executive hereunder for the remainder of
the ten (10) year period shall be determined utilizing the net present
value thereof (as determined by the Company utilizing reasonable
actuarial and interest rate assumptions) and said amount shall be added
to the amount of the Deferred Compensation previously accrued. Payment
shall be made to the Executive if he is alive on the payment date, to
his legal representative if he is alive on the payment date and a legal
representative has been appointed for him, or to his beneficiary or
beneficiaries if he is not alive on the payment date. The Executive may
designate a beneficiary or beneficiaries in a written designation of
beneficiary delivered to the Company prior to his death which
beneficiary or beneficiaries shall be entitled to receive said Deferred
Compensation when it is payable. If there is no designated beneficiary,
said Deferred Compensation shall be
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payable to the surviving spouse of the Executive, if any, and in the
absence of a surviving spouse, to the Estate of the Executive. In
making the payment of Deferred Compensation provided for in this
Agreement, the Company may make such payment (subject to any applicable
law requiring withholding for tax or other purposes) in cash or by
transferring any asset then held by the Company in an amount equal to
the amount of the Deferred Compensation, including, without limitation,
by forgiving any obligation owed to the Company by the Executive. In
the event that the Company sets aside any funds, assets or other
property to provide for the Company's ability to meet its obligations
hereunder, such funds, assets or other property shall be and remain
general unrestricted assets of the Company, shall not be considered as
security for any obligation of the Company hereunder and shall be
subject to the claims of the general unsecured creditors of the Company
until paid over to the Executive.
Section 5. Termination.
Notwithstanding the provisions of Section 2 of this Agreement, but
subject to the provisions of Section 6 hereof, the Executive's employment
hereunder shall terminate under the following circumstances:
(a) Death or Disability. This Agreement shall terminate upon
the death or disability of the Executive. "Disability" shall mean that
the Executive is no longer able to perform the essential functions of
the chief executive officer and chief technical officer of the Company
for a continuous period of six (6) months or a total of nine (9) months
in any one-year period. If any question arises as to whether the
Executive has been so disabled, the Executive shall submit to an
examination by a physician selected by the Board of Directors of the
Company to whom the Executive has no reasonable objection, and
following such examination, the physician shall submit to the Company
and to the Executive a report in reasonable detail setting forth his or
her opinion as to whether the Executive was so disabled. Such report
shall for the purposes of this Agreement be conclusive of the issue.
Notwithstanding the foregoing, in the event of a disability (as defined
above), the Company shall take no action that violates the applicable
provisions of the Americans With Disabilities Act.
(b) Termination by the Company without Cause. The Company may
at any time by action of a majority of the entire membership of its
Board of Directors terminate the Executive's employment without Cause
(as defined below) by giving the Executive notice of the effective date
of termination (which effective date may be the date of such notice)
(the "Date of Termination"). A voluntary termination by the Executive
within sixty (60) days after the Company has reduced his status,
materially reduced his responsibilities or materially reduced his
salary in a manner not applied to all executive officers of the Company
(a "Deemed Termination Event") will be deemed to be termination by the
Company without Cause. The Executive will provide ten (10) days prior
written notice to the Company of any such voluntary termination by
reason of a Deemed Termination Event, and during such 10-day period the
Company shall have an opportunity to cure the Deemed Termination Event.
If a cure is effected within such 10-day period, the provisions of this
Section 5(b) shall no longer be applicable with respect to the Event so
cured. If the Company shall terminate (or shall be deemed to have
terminated) the Executive without Cause hereunder, any unvested options
granted
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hereunder shall be immediately forfeited, and the Company shall have
the obligation to pay the Executive the following:
(i) Through the Date of Termination, the Company shall
pay the Executive his full base salary at his then current annual rate
of pay, and continue the benefits in effect at the time notice of
termination is given.
(ii) The Company shall pay the Executive, as a severance
payment, an amount equal to (a) 150% of his then current annual base
salary plus (b) the maximum cash portion of the Executive's Annual
Performance Bonus under Section 4(b) hereof, one-half of which
aggregate amount shall be payable in a lump sum (less required
withholding) on or about the Date of Termination, and the balance of
which shall be payable in equal installments during the 18 months
following the Date of Termination at such times as salary payments
would normally have been made hereunder if a termination under this
section had not occurred.
(iii) The Company shall pay the amount required under
Section 4(d) hereof on account of the "split dollar" insurance policy
referenced therein, if that policy is in effect on the Date of
Termination.
Anything in this Section 5(b) to the contrary
notwithstanding, in the event that the Executive breaches any of the
representations, warranties and covenants set forth in Section 6, or in
the Noncompetition, Nondisclosure and Inventions Agreement referenced
therein (the "Nondisclosure and Inventions Agreement") in any material
respect, the Company will have no further obligation to make payments
under this subsection (b) following knowledge of such breach and may
pursue all other available remedies. In the event that the Company
shall fail to make any payment required to be made under Section 5(b)
hereof, and such failure is not cured within thirty (30) days after
receipt of written notice thereof from the Executive, the Executive
will have no further obligation under Sections 1 and 4 of the
Nondisclosure and Inventions Agreement.
(c) Termination by the Company for Cause. The Company shall
have the right to terminate the Executive's employment effective
immediately for any of the following reasons (each of which is referred
to herein as "Cause") by giving the Executive written notice which
specifically identifies the Cause in reasonable detail:
(i) the willful breach of any provision of Section 3
(including but not limited to a continuing refusal to follow reasonable
and lawful directives of the Board) or of the Nondisclosure and
Inventions Agreement;
(ii) any act of intentional fraud or dishonesty with
respect to any aspect of the Company's or any affiliate's business;
(iii) continued use of illegal drugs;
(iv) as a result of the Executive's gross negligence or
willful misconduct, the Executive shall violate, or cause the Company
to violate, any applicable federal or state securities or banking law
or regulation and as a result of such violation, shall become, or shall
cause the Company or any affiliate to become, the subject of any
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legal action or administrative proceeding seeking an injunction from
further violations or a suspension of any right or privilege;
(v) as a result of the Executive's gross negligence or
willful misconduct, the Executive shall commit any act that causes, or
shall knowingly fail to take reasonable and appropriate action to
prevent, any material injury to the financial condition or business
reputation of the Company or any affiliate; or
(vi) indictment for a felony.
If the Executive's employment is terminated by the Company pursuant to
this Section 5(c), then (1) the Company shall have no further
obligations hereunder accruing from and after the effective date of
termination and shall have all other rights and remedies available
under this or any other agreement and at law or in equity; (2) the
Company shall be entitled to collect the cash surrender value of the
Split Dollar Policy, and the Executive shall forthwith reimburse the
Company for all premiums paid by the Company for the Split Dollar
Policy in excess of the cash surrender value realized by the Company,
and (3) any unvested options granted hereunder shall immediately
expire.
(d) Termination by the Executive. The Executive may terminate
this Agreement at any time upon sixty (60) days prior written notice to
the Company. The Board of Directors of the Company may in such event
elect to waive the period of notice, or any portion thereof, in which
event the Executive's date of termination shall be that date within the
sixty (60) day notice period determined by the Board. Upon termination
of this Agreement by the Executive for any reason other than a material
breach of this Agreement by the Company, or the occurrence of a Deemed
Termination Event under Subsection 5(b) hereof: (1) the Company shall
have no further obligations hereunder accruing from and after the
effective date of termination; (2) the Company's rights with respect to
the Split Dollar Policy shall be the same as provided in Section 5(c)
hereof in the case of Termination by the Company for Cause; and (3) any
unvested options hereunder shall immediately expire.
Section 6. Noncompetition, Nondisclosure and Inventions.
The Executive agrees that as a condition of his employment he will
reaffirm simultaneously herewith and be bound by the terms of a Noncompetition,
Nondisclosure and Inventions Agreement (the "Nondisclosure and Inventions
Agreement") in substantially the form set forth as Exhibit A hereto, the terms
of which are incorporated herein by reference. The Executive's obligations under
the Nondisclosure and Inventions Agreement shall survive the termination of this
Agreement as set forth therein. For purposes of the Nondisclosure and Inventions
Agreement only, the Executive shall be deemed to be an employee of the Company
following termination of this Agreement as long as the Executive is entitled to
and is receiving payments under Section 5(b) hereof.
Section 7. Conflicting Agreements.
The Executive hereby warrants and covenants that his employment by the
Company will not result in a breach of the terms, conditions or provisions of
any agreement to which the
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Executive is subject, and that he has not made and will not make any agreements
in conflict with this Agreement.
Section 8. Successors and Assigns.
This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Executive and the Company, except that the Executive may not
assign any of his rights or obligations under this Agreement and the Company may
not assign any of its rights or obligations under this Agreement except as
provided in the following sentence. The Company may assign its rights under this
Agreement, as security, to any lender to the Company, and in the event of a sale
of all of the stock, or substantially all of the stock, of the Company, or
consolidation or merger of the Company with or into another corporation or
entity, or the sale of substantially all of the operating assets of the Company
to another corporation, entity or individual, the Company may assign its rights
and obligations under this Agreement to its successor-in-interest provided that
such successor-in-interest shall have assumed all obligations of the Company
hereunder by written agreement with the Executive.
Section 9. Severability.
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect such provision in any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein. Any court having jurisdiction shall have the power
to reduce the duration, area or scope of any invalid, illegal or unenforceable
provision relating to the noncompetition portion of the Executive's
Nondisclosure and Inventions Agreement in order to render such provision valid
and enforceable.
Section 10. Notice.
Any notice provided for in this Agreement must be in writing and must
be either personally delivered, mailed by first class mail (postage prepaid and
return receipt requested), sent by facsimile transmission or sent by reputable
overnight courier service, to the recipient at the address indicated below:
To the Company:
Spectra Science Corporation
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
To the Executive:
000 Xxxxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
or to such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement will be deemed to have been given when so
delivered or sent or if mailed, five days after so mailed.
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Section 11. Amendments and Waivers.
Any provision of this Agreement may be amended or waived only with the
prior written consent of the Executive and a majority of the Board of Directors
of the Company other than the Executive. Notwithstanding the foregoing, the
failure of either party to require the performance of any term or obligation of
this Agreement, or the waiver by either party of any breach of this Agreement,
shall not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach.
Section 12. Entire Agreement.
This Agreement embodies the complete agreement and understanding
between the parties and supersedes and preempts any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way. Any employment,
benefit or bonus arrangements or agreements between the Company and the
Executive that existed at any time prior to the execution and delivery of this
Agreement are hereby terminated by the Executive; provided, however, that the
Executive shall remain liable for any breach of such arrangements or agreements
occurring during the term of such arrangement or agreement. From and after the
date of this Agreement, the Executive shall not be entitled to any compensation
from the Company on account of any such arrangement or agreement.
Section 13. Governing Law.
All questions concerning the construction, validity and interpretation
of this agreement will be governed by the internal law, and not the law of
conflicts, of Rhode Island.
Section 14. Remedies.
Each of the parties to this Agreement will be entitled to enforce his
or its rights under this Agreement specifically, to recover damages (including,
without limitation, reasonable fees and expenses of counsel) by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in his or its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach or threatened breach
of the provisions of this Agreement and that any party may in his or its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
Section 15. Captions.
The captions set forth in this Agreement are for convenience only, and
shall not be considered as part of this Agreement or as in any way limiting or
amplifying the terms and provisions hereof.
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In witness whereof, the parties have signed, sealed and delivered this
Agreement as of the date first above written.
SPECTRA SCIENCE CORPORATION
By: /s/ Xxxxxx Xxxxx
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EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx
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Schedule 1
to
Employment Agreement
between
Xxxxx Xxxxxxx and Spectra Science Corporation
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.. Intellectual property: Expansion of the existing portfolio in areas strategic
to the Company's future growth, including licensing and sales.
.. Collaborations and spin-offs executed and immediate possibilities for.
.. Revenue streams, growth positioning in core areas.
.. Sale of equity at levels indicating an increased valuation.
Exhibit A
NONCOMPETITION, NONDISCLOSURE AND INVENTIONS AGREEMENT
The undersigned, in consideration and as a condition of my employment with
Spectra Acquisition Corp. (the "Company"), does hereby agree with the Company as
follows:
1. During the period of my employment by the Company, and for a period of
twelve (12) months after the termination of my employment, I agree that I will
not (i) interfere with the relationship between the Company or any of its
affiliates and any of their respective employees, agents or representatives,
(ii) directly or indirectly interfere with the relationship between the Company
or any of its affiliates and the Company's customers, collaborators or joint
venturers, dealers, distributors, vendors or sources of supply, and (iii)
directly or indirectly own, manage, operate or control, or be employed by,
participate in or be connected in any manner with the ownership, management,
operation or control of, any business or enterprise engaged in any specific
business activity in which the Company has been involved during the term of my
employment (except such activity as the Board of Directors has in writing
advised me that it does not intend to pursue), or in the commercial applications
of (a) laser light generation with the use of scattering media for feedback; (b)
glass-based micro-patterning using laser light or (c) quantum dot phosphor
technology.
2. The Company shall have the right, subject to applicable law, acting
reasonably and in good faith, to inform any third party that the Company
believes to be participating, or to be contemplating participating, with me or
receiving assistance from me in violation of this Agreement, of the terms of
this Agreement and of the rights of the Company hereunder, and that
participation by any such third party with me in activities in violation of this
Agreement may give rise to claims by the Company against such third party.
3. I understand that my relationship with the Company and its officers and
employees is one of trust and confidence, and that during the period of my
employment I may acquire or may have already acquired, knowledge of, or access
to, information which relates to the business, operations or plans of the
Company which is not known to the general public (hereinafter "Confidential
Information"). Confidential Information may include, but is not limited to, all
know-how and proprietary information of the Company relating to the research,
development, utilization, manufacture and use of any of its intellectual
property or products, and information about Company's business operations,
including, by way of illustration, the Company's investment plans or strategies,
budgets, costs, trade secrets, customer or vendor lists, customer, vendor or
consultant contracts and the details thereof, pricing policies, operational
methods, information about products, marketing and merchandising plans or
strategies, business acquisition plans, personnel acquisition plans, and all
other information pertaining to the business of the Company or any affiliate
that is not publicly available. I will not at any time, whether during or after
the termination of my employment, reveal to any person, association or company
any Confidential Information of the Company so far as it has come or may come to
my knowledge, except as may be required in the ordinary course of performing my
duties as an employee of the Company or except as may be in the public domain
through no fault of mine, and I will keep secret all matters entrusted to me and
shall not use or attempt to use any such Confidential Information in any manner
which may injure or cause loss or may be reasonably
expected to injure or cause loss, whether directly or indirectly, to the
Company. My obligation of confidentiality under this paragraph shall terminate
five (5) years after the termination of my employment with the Company.
Further, I agree that during my employment I shall not make, use or permit
to be used any notes, memoranda, records, files, computer programs, data,
laboratory notebooks or any other materials of any nature relating to any matter
within the scope of the business of the Company or concerning any of its
dealings or affairs otherwise than for the benefit of the Company. I further
agree that I shall not, after the termination of my employment, use or permit to
be used, any such notes, memoranda, records, files, computer programs, data,
laboratory notebooks or other materials, it being agreed that any of the
foregoing shall be and remain the sole and exclusive property of the Company and
that immediately upon the termination of my employment I shall deliver all of
the foregoing, and all copies thereof, to the Company, at its main office.
4. I will not at any time during the twelve (12) month period following the
termination of my employment with the Company solicit or encourage any employee
of the Company to terminate his or her employment in order to work for a
business which competes or intends to compete with the Company and I will use my
best efforts to ensure that my then employer does not do so.
5. (a) I acknowledge that any improvements or inventions made by me either
alone or with others during my employment by the Company or made thereafter as a
result of any invention conceived or work done during my employment by the
Company so far as the same relate to the Company's business, products, processes
and developments, and all my right, title and interest in and to the same shall
be deemed as made and held by me in a fiduciary capacity and solely for the
benefit of the Company, shall not be disclosed to others without its written
consent and shall be the sole and exclusive property of the Company.
Notwithstanding the foregoing, I expect to maintain some professional connection
with Xxxxx University which may involve supervision of Xxxxx University
employees or students under sponsored research programs at Xxxxx. Any inventions
made by me in the course of any such activities will belong to Xxxxx University
under the terms of its customary agreement with sponsors and investigators,
although any right to inventions which I may retain free of any claims from
Xxxxx University or its sponsors or investigators shall be subject to the first
sentence of this paragraph 5(a). I will inform the Board of Directors of any
such arrangement in detail, and will not become involved in any such sponsored
research programs which are directed toward areas in which the Company is
commercially involved without prior written approval from the Board of Directors
in each specific case.
(b) I shall disclose promptly and fully to the Company and to its
attorneys all such improvements and inventions and shall, upon their request,
surrender to them all tangible evidence of said improvements and inventions.
(c) I, when requested so to do either during or after my employment,
shall
i. assign and convey to the Company my entire right, title and
interest in and to such improvements and inventions;
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ii. assist the Company and its agents in preparing patent
applications, United States and foreign, covering the same;
iii. sign and deliver all such applications and assignments of
the same to the Company; and
iv. generally give all information and testimony, sign all
papers and do all things which may be needed or requested by the Company, to the
end that the Company may obtain, extend, reissue, maintain and enforce United
States and foreign patents covering such improvements and inventions.
(d) I understand that the Company will bear all expenses which it
causes to be incurred in obtaining, extending, reissuing, maintaining and
enforcing such patents and in vesting and perfecting title thereto in the
Company, and will pay me for any time which it may require of me therefor
subsequent to the termination of my employment, such payment to be at an hourly
rate equivalent to that at which I am paid during my employment by the Company
6. I understand that this Agreement, while it relates to certain terms and
conditions of my employment, does not create an obligation on the part of the
Company or any other person to continue my employment. In the event of the
termination of my employment, I acknowledge that my experience and capabilities
are such that I can obtain employment in a business other than that in which the
Company is engaged.
7. I further represent that my performance of all of the terms of this
Agreement and as an employee of the Company does not and will not breach any
agreement to maintain in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree that I will not enter into, any agreement, either written or
oral, in conflict herewith.
8. I agree that any breach of this Agreement by me could cause irreparable
damage and that in the event of such breach the Company shall have, in addition
to any and all remedies of law, the right to an injunction, specific performance
or other equitable relief to prevent the violation of my obligations hereunder.
9. Any waiver by the Company of a breach of any portion of this Agreement
shall not operate or be construed as a waiver of any subsequent breach thereof.
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10. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect such provision in any
other jurisdiction, but this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein. Any court having jurisdiction shall have the power
to reduce the duration, area or scope of any invalid, illegal or unenforceable
provision relating to the noncompetition portion of this Agreement in order to
render such provision valid and enforceable in its reduced form.
11. My obligations under this Agreement shall survive the termination of my
employment in accordance with the foregoing provisions regardless of the manner
of such termination and shall be binding upon my heirs, executors and
administrators.
12. I understand that my obligations under this Agreement will extend to
any other organization which succeeds to the business of the Company by reason
of any sale, merger or similar action.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
23rd day of August 1996.
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Xxxxx Xxxxxxx
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