EMPLOYMENT AGREEMENT OF ANTONIO GONCALVES, JR.
EMPLOYMENT
AGREEMENT OF XXXXXXX XXXXXXXXX, XX.
AGREEMENT
dated as of August 11, 2006 (“Effective Date”) by and between Advance Nanotech,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxxxxx, Xx. (the
"Executive").
In
consideration of the mutual covenants herein contained and of the mutual
benefits herein provided, the Company and the Executive agree as
follows:
1. Representations
and Warranties.
The
Executive represents and warrants to the Company that Executive is not bound
by
any restrictive covenants and has no prior or other obligations or commitments
of any kind that would in any way prevent, restrict, hinder or interfere with
Executive's acceptance of continued employment or the performance of all duties
and services hereunder to the fullest extent of the Executive's ability and
knowledge. The Executive agrees to indemnify and hold harmless the Company
for
any liability the Company may incur as the result of the existence of any such
covenants, obligations or commitments.
2. Term
of Employment.
The
Company will continue to employ the Executive and the Executive accepts
continued employment by the Company on the terms and conditions herein contained
for a period (the "Employment Period") provided in paragraph 5.
3. Duties
and Functions.
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(a)
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The
Executive shall be employed as Chief Operating Officer of the Company.
The
Executive shall report directly to the Chief Executive Officer and
to the
Board of Directors of the Company (the
“Board”).
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(b)
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The
Executive agrees to undertake the duties and responsibilities inherent
in
the position of Chief Operating Officer of the Company. The Executive
agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company of which the Executive has
notice
and any change thereof which may be adopted at any time by the
Company.
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(c)
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The
Executive agrees that as soon as reasonably practicable following
the
Effective Date, but in no event later than December 31, 2006, the
Executive shall prepare a market-comparable revised incentive structure
for senior management of the Company to participate in the success
of the
Company’s commercialization efforts of its subsidiaries and portfolio of
technologies.
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(d)
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During
the Employment Period, the Executive will not engage in consulting
work or
any trade or business that is a competitor of the Company or to the
extent
that the same significantly interferes with the performance of the
Executive’s duties hereunder, it being understood, however, that the
Executive will be performing assignments for, and may be an officer
or
director of, entities in which the Company has an equity interest,
without
additional compensation unless otherwise specifically agreed. In
no event
shall it be a violation of this Agreement for the Executive
to:
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-1-
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(i)
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serve
on corporate, civic or charitable boards or committees or perform
functions for such organizations,
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(ii)
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deliver
lectures, fulfill speaking engagements or teach at educational
institutions, or
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(iii)
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manage
personal investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities
to the
Company in accordance with this
Agreement.
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Subject
to customary business travel, the Executive's duties ordinarily will be
performed by the Executive in the course of the Executive's regular presence
during normal working hours on business days Monday through Friday the Company’s
principal executive offices at 000 Xxxxxxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, XX 00000, or at such other location mutually agreed upon by the
parties.
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(f)
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Six
(6) months following the Effective Date, the Executive and the Chief
Executive Officer shall review the performance of the Executive from
the
Effective Date. At such time, the Chief Executive Officer shall,
in good
faith, make the determination of whether the Executive shall be appointed
President of the Company in addition to maintaining the position
and
responsibilities of Chief Operating
Officer.
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4. Compensation.
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(a)
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Base
Salary:
As compensation for the Executive’s services to the Company hereunder,
during the Executive's employment as Chief Operating Officer of the
Company, the Company agrees to pay the Executive a base salary at
the rate
of Two Hundred Fifty Thousand Dollars ($250,000) per annum (pro rata
for
periods of less than an entire calendar year), payable in equal
installments in accordance with the Company's normal payroll schedule
but
in no event less often than once per month on substantially the same
day
each month. The Company may withhold from any amounts payable under
this
Agreement such federal, state, local or other taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
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(b)
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Inducement
Grant:
As
an inducement to Executive to enter into this Agreement, the
Company shall
grant to Executive the following (“Inducement Grants”), unless otherwise
agreed by the parties in
writing:
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-2-
1) Inducement
grant payable in eight fiscal-year quarterly installments over the first two
years of employment with immediate vesting at the end of months 3, 6, 9, 12,
15,
18, 21 and 24 of Executive’s employment with a total aggregate value of $250,000
payable by equity grant with a cash value on the grant date of 1/8 of
$250,000.
2) $100,000
signing bonus payable by cash or equity grant or any combination thereof to
be
paid by January 15, 2007. Any portion of such signing bonus granted in equity
shall be in accordance with the terms and conditions of the yet to be
implemented executive trading plan which shall govern the sale of shares of
Company stock. If the Executive either (i) terminates employment under this
Agreement for “Good Reason” (as defined in section 5(d) of this Agreement) or
(ii) is terminated by Company for cause (as defined in section 5(e) and
is not
employed by Company on the first anniversary of the Commencement Date, the
Executive shall return to Company one-half of the signing bonus set forth in
this section.
3) If
the
Inducement Grants are not made pursuant to a plan covered by a registration
statement declared effective by the Securities and Exchange Commission (“SEC”),
the Company agrees to file with the SEC, as soon as reasonably practicable
after
the Effective Date, a Form S-8 registration statement covering such shares
of
Company stock.
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(c)
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Equity
Incentive Plan:
As compensation for the Executive’s services to the Company hereunder, the
Company, for purposes of a performance based bonus, agrees to enroll
the
Executive in the Company’s Equity Incentive Plan with a bonus target of
$250,000 for the first year of performance in stock grants. Such
grants
shall be based on 50% personal performance and 50% corporate performance
(metrics to be determined). One quarter of the actual bonus amount
(as
determined by the compensation committee of the Board of Directors
based
upon the recommendations of the CEO at the end of Executive’s first year
of service) shall be granted at the end of fiscal quarters, months
15, 18,
21 and 24 of the Executive’s employment in stock grants with immediate
vesting.
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(d)
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Options:
Executive shall be eligible to receive stock options/equity grants
in
securities of the Company from time to time, which grants, if any,
shall
be at the discretion of the Board or its designee (including, without
limitation, the Compensation Committee), provided that the Board
or its
designee shall consider the granting of such compensation at least
annually. The terms and conditions governing eligibility for, entitlement
to, and receipt of any options or other form of equity in the Company
shall be governed by the Company’s incentive compensation programs, as the
same may exist in writing from time to time. Unless otherwise agreed
in
writing, such options, and the shares underlying such options, are
not
registered under federal, state or other securities laws, and shall
be
“restricted” within the meaning of applicable securities laws, and
legended accordingly. The Company shall have no obligation to register
such options, and shall have no obligation to register the shares
underlying such options; provided,
that the Executive shall have registration rights with respect to
the
shares underlying such options which are substantially the same as
the
registration rights of any other Executive or director of the Company
in
respect of the Company’s shares.
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-3-
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(e)
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Other
Expenses:
In addition to the compensation provided for above, the Company agrees
to
pay or to reimburse the Executive in timely fashion for all reasonable,
ordinary and necessary, properly vouchered, client-related business
or
entertainment expenses incurred in the performance of the Executive’s
services hereunder in accordance with Company policy in effect from
time
to time, provided, however, that the amount available to the Executive
for
such travel, entertainment and other expenses may require advance
approval
by President or Chief Executive Officer of the Company or such officer’s
designee(s) in accordance with the Company’s reimbursement policies, as
the same may be established by the Company’s Board of Directors from time
to time. The Executive shall submit reasonable substantiation in
the form
of vouchers and receipts for all expenses for which reimbursement
is
sought.
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(f)
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Vacation:
The Executive shall be allowed up to the greater of Four (4) weeks
of paid
vacation during each calendar year or such greater amount of paid
vacation
as is generally permitted by the Company to its senior executives,
with no
carry-over of accrued vacation from year to
year.
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(g)
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Medical
and Dental Insurance:
The executive is entitled to join the company’s medical and dental plan
effective on the first day of the month following the executives
first day
of employment. The company currently pays for 95% of the company’s health
and dental plan coverage and employees contribute 5% to the plan
on a
pre-tax basis. Enrollment in the plan is optional but must be declared
within 30 days of the executives first day of employment.
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(h)
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Other
Company Benefits:
In addition to the Executive’s compensation provided by the foregoing, the
Executive shall be entitled to participate in the other benefit programs,
if any, available generally to executives of the Company generally
pursuant to Company programs, including, by way of illustration,
personal
leave, paid holidays, sick leave, bonus, profit-sharing, stock option
plans, retirement, 401K, disability, dental, vision, group sickness,
accident, life or health insurance programs of the Company which
may now
or, if not terminated, shall hereafter be in effect, or in any other
or
additional such programs which may be established by the Company,
as and
to the extent any such programs are or may from time to time be in
effect,
as determined by the Company and
the terms hereof, subject to the applicable terms and conditions
of the
benefit plans in effect at that time.
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-4-
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(i)
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Commuting
Allowance: The
Executive is entitled to a non-accountable commuting allowance of
$500 per
month, paid quarterly in arrears.
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5. Employment
Period; Termination.
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(a)
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Commencement.
The Executive's employment shall commence on August 21, 2006 (the
“Commencement Date”), and shall continue thereafter unabated until
terminated by either party pursuant to the terms of this
Agreement.
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(b)
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Employment
Period.
The Employment Period shall commence on the Commencement Date and
shall
continue until terminated upon the earlier to occur of the following
events: (i) the close of business on the Second (2nd) anniversary
of the
Commencement Date (the “Initial Term”) or (ii) the death or permanent
disability (as defined in Paragraph 5 (h)) of the Executive, provided,
however,
that, on the Second (2nd) anniversary of the Commencement Date, and
on
every subsequent annual anniversary, and unless either party has
given the
other party written notice at least ninety (90) days prior to the
such
anniversary date, the term of this Agreement and the Employment Period
shall be renewed for a term ending one (1) year subsequent to such
date,
unless sooner terminated as provided herein (the “Renewal Term”) may be
renewed by mutual agreement of the parties (any such renewal period
being
hereinafter referred to as a “Renewal Term”). The Initial Term plus any
Renewal Terms shall be included in the “Employment
Period.”
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(c)
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Termination
By Executive Without Good Reason.
Notwithstanding the provisions of paragraphs 5(a) and (b) above,
the
Executive may terminate the employment relationship at any time pursuant
to this paragraph 5(c) for any reason or no reason by giving the
Company
written notice at least one hundred eighty (180) days prior to the
effective date of termination. The Company, at its election,
may:
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(i)
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require
Executive to continue to perform the Executive’s duties hereunder for the
full one hundred eighty (180) day notice period;
or
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(ii)
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terminate
Executive’s employment at any time during such one hundred eighty (180)
day notice period.
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An
election by the Company to terminate Executive’s employment at any time during
such one hundred eighty (180) day notice period shall not be deemed to be a
termination of Executive’s employment by the Company without Cause or a
termination of Executive’s employment by the Company for Cause, but shall be
treated as a Termination by Executive Without Good Reason. If the Executive's
employment is terminated by the Company pursuant to this paragraph 5(c) before
the one hundred eighty (180) day notice period has expired without cause, the
Executive shall continue to receive the Executive’s base salary and bonus, and
the Company shall continue medical and dental benefits for the Executive and
the
Executive’s eligible family, by paying the premium for health insurance
continuation coverage under COBRA for the Executive and the Executive’s eligible
family to the extent the Executive elects COBRA coverage (or by continuing
to
contribute the employer portion of the premium normally paid by the Company
for
its current employees), for a period of time (the “Severance Period”) which
shall be determined as set forth in the next sentence. The Severance Period
under those circumstances shall consist of the unexpired balance of the one
hundred eighty (180) notice period pursuant to this paragraph 5(c). The sum,
if
any, payable to the Executive in respect of the Severance Period shall be
payable in equal monthly installments on the fifteenth (15th)
day of
each month in the Severance Period. All other compensation and benefits paid
by
the Company to the Executive shall cease upon the Executive’s last day of
employment, except such benefits as may be required to be extended under
applicable State or Federal law. The Executive acknowledges and agrees that
the
non-compete restrictions set forth in Section 7 of this Employment Agreement
will remain in full force and effect for the twelve (12) month period after
the
termination of the Executive’s employment. Furthermore, the obligations imposed
on Executive with respect to confidentiality, non-disclosure and assignment
of
rights to inventions or developments in this Agreement or any other agreement
executed by the parties shall continue, notwithstanding the termination of
the
employment relationship between the parties.
-5-
The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(c) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation pursuant to this paragraph 5(c) unless the Executive executes
and
delivers to the Company after a notice of termination a general release in
form
and substance reasonably satisfactory to the Company by which the Executive
releases the Company from any obligations and liabilities of any type whatsoever
including those under this Agreement, except for the Company's obligations
with
respect to the Termination Compensation, which general release shall not affect
the Executive’s right to indemnification, if any, for actions taken within the
scope of the Executive’s employment or the Executive’s rights in respect of the
Executive’s vested stock options, if any. The parties hereto acknowledge that
the Termination Compensation to be provided under this paragraph 5(c) is to
be
provided in consideration for the general release. The Executive will not be
entitled to and shall not receive any other compensation or benefits of any
type
following the effective date of termination, except such benefits as may be
required to be extended under applicable state or Federal law.
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(d)
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Termination
by Executive for “Good Reason”.
Subject to the provisions outlined below, at any time after the date
Executive commences employment under this Agreement, upon One Hundred
Eighty (180) days’ written notice to the Company of the Executive’s intent
to terminate the Agreement, Executive shall have the right to terminate
the Executive’s employment under this Agreement for “Good Reason” (as
defined below). For purposes of this Agreement, “Good Reason” is defined
as any one of the following:
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-6-
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(i)
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Company’s
material breach of this Agreement;
or
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(ii)
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relocation
of the Company’s headquarters and/or Executive’s regular work address to a
location which is more than forty (40) miles from the current principal
address at which the Executive is required to perform the Executive’s
duties without Executive’s prior written consent; provided,
however,
that it shall not constitute Good Reason unless Executive shall have
provided the Company with written notice of its alleged actions
constituting Good Reason (which notice shall specify in reasonable
detail
the particulars of such Good Reason) and Company has not cured any
such
alleged Good Reason or substantially commenced its effort to cure
such
breach within seven (7) days of Company’s receipt of such written notice
and thereafter continues to pursue such cure with reasonable
diligence.
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A
termination for Good Reason shall be treated for all severance purposes as
a
Termination by the Company “Without Cause,” and Executive shall be entitled to
receive all of the payments and benefits identified in paragraph 5(f) on the
terms and conditions set forth in paragraph 5(f).
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(e)
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Termination
By Company For Cause.
If
the Executive's employment is terminated for “cause," the Executive will
not be entitled to and shall not receive any compensation or benefits
of
any type following the effective date of termination, except such
benefits
as may be required to be extended under applicable State or Federal
law.
As used in this Agreement, the term "cause" shall include but not
necessarily be limited to:
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(i)
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conviction
of a felony or a crime involving moral
turpitude;
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(ii)
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engagement
in conduct which has the effect, or might reasonably be expected
to have
the effect of bringing disrepute to the Company’s reputation or hold the
Company or the Executive up to public
ridicule;
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(iii)
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fraud
on or misappropriation of any funds or property of the Company, any
affiliate, customer or vendor;
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(iv)
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willful
violation of any securities law, rule or regulation (other than minor
traffic violations or similar
offenses);
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(v)
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personal
dishonesty, or breach of fiduciary duty which involves personal
profit;
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(vi)
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gross
incompetence in the performance of the Executive’s duties under this
Agreement;
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(vii)
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willful
misconduct in connection with the Executive’s
duties;
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(viii)
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habitual
absenteeism or inattention to the Executive’s
duties;
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(ix)
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chronic
use of alcohol, drugs or other similar substances (other than pursuant
to
medical prescriptions and under doctors’ supervision for treatment of
legitimate illnesses or conditions) which affects the Executive’s work
performance;
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(x)
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willful
violation of any Company rule, regulation, procedure or policy which
has,
or may reasonably be expected to have, a material adverse effect
on the
Company;
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(xi)
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engaging
in behavior that would constitute grounds for liability for harassment
(as
proscribed by the U.S. Equal Employment Opportunity Commission Guidelines
or any other applicable State or local regulatory body) or other
egregious
conduct that violates laws governing the workplace;
or
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(xii)
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material
breach of any material provision of any employment, non-disclosure,
non-competition, non-solicitation or other similar agreement executed
by
the Executive for the benefit of the Company (including, without
limitation, such provisions within this Agreement) or of any material
Company policy, all as determined by the Board, which determination
will
be conclusive.
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Notwithstanding
anything to the contrary, employment may not be terminated for “cause” in the
event that the Executive becomes permanently disabled as set forth in paragraph
5(g) or dies. Anything
herein to the contrary notwithstanding, the Company shall give the Executive
written notice prior to terminating the Executive's employment for “cause” under
any circumstance in which the conduct constituting “cause” is reasonably open to
cure (for instance, by way of illustration, where the “cause” does not involve a
violation of trust or otherwise adversely affect the relationship between the
Executive and the Company on a going-forward basis or involve the commission
of
an act, such as a felony, or an unauthorized disclosure of confidential
material, or an act which may constitute illegal harassment under laws governing
the workplace, which can not be undone), setting forth in reasonable detail
the
nature of any alleged breach and the conduct required to cure such breach.
If,
and only if, the nature of the breach is such that the breach is reasonably
open
to cure, then the Executive shall have fourteen (14) days from the giving of
such notice within which to cure.
-8-
The
Executive acknowledges and agrees that the non-compete restrictions set forth
in
Section 7 of this Employment Agreement will remain in full force and effect
for
the six (6) month period subsequent to the Executive’s termination for cause.
Furthermore, the obligations imposed on Executive with respect to
confidentiality, non-disclosure and assignment of rights to inventions or
developments in this Agreement or any other agreement executed by the parties
shall continue, notwithstanding the termination of the employment relationship
between the parties.
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(f)
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Termination
By Company Without Cause.
The Company shall retain the right to terminate the Executive without
cause or prior written notice, although the Company may give notice
pursuant to this paragraph 5(f) in its sole discretion. If the Executive's
employment is terminated by the Company without cause pursuant to
this
paragraph 5(f), the Executive shall continue to receive the Executive’s
base salary and bonus, and the Company shall continue medical and
dental
benefits for the Executive and the Executive’s eligible family, by paying
the premium for health insurance continuation coverage under COBRA
for the
Executive and the Executive’s eligible family to the extent the Executive
elects COBRA coverage (or by continuing to contribute the employer
portion
of the premium normally paid by the Company for its current employees),
for a Severance Period which shall be determined as set forth in
the next
sentence. The Severance Period shall consist of the lesser of one
hundred
and eighty (180) days from the earlier to occur of the date: (i)
notice of
termination is given pursuant to this paragraph 5(f); or (ii) the
date on
which employment actually terminates pursuant to this paragraph 5(f).
The
Executive acknowledges and agrees that the non-compete restrictions
set
forth in Section 7 of this Employment Agreement will remain in full
force
and effect for the greater of the Severance Period or the six (6)
month
period subsequent to the Executive’s termination. The sum, if any, payable
to the Executive in respect of the Severance Period shall be payable
in
equal monthly installments on the fifteenth (15th)
day of each month in the Severance Period. Furthermore, the obligations
imposed on Executive with respect to confidentiality, non-disclosure
and
assignment of rights to inventions or developments in this Agreement
or
any other agreement executed by the parties shall continue,
notwithstanding the termination of the employment relationship between
the
parties.
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The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(f) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation unless the Executive executes and delivers to the Company after
a
notice of termination a general release in form and substance reasonably
satisfactory to the Company by which the Executive releases the Company from
any
obligations and liabilities of any type whatsoever including those under this
Agreement, except for the Company's obligations with respect to the Termination
Compensation, which general release shall not affect the Executive’s right to
indemnification, if any, for actions taken within the scope of the Executive’s
employment or the Executive’s rights in respect of the Executive’s vested stock
options, if any. The parties hereto acknowledge that the Termination
Compensation to be provided under this paragraph 5(f) is to be provided in
consideration for the general release. The Executive will not be entitled to
and
shall not receive any other compensation or benefits of any type following
the
effective date of termination, except such benefits as may be required to be
extended under applicable state or Federal law.
-9-
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(g)
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Termination
for Executive’s Permanent Disability.
To
the extent permissible under applicable law, in the event the Executive
becomes permanently disabled during employment with the Company,
the
Company may terminate this Agreement by giving thirty (30) days notice
to
the Executive of its intent to terminate, and unless the Executive
resumes
performance of the duties set forth in Paragraph 3 within five (5)
days of
the date of the notice and continues performance for the remainder
of the
notice period, this Agreement shall terminate at the end of the thirty
(30) day period. "Permanently disabled" for the purposes of this
Agreement
means the inability, due to physical or mental ill health, to perform
the
essential functions of Executive's job, with a reasonable accommodation,
for ninety (90) days during any one employment year irrespective
of
whether such days are consecutive. In the event of any dispute under
this
paragraph 5(g), the Executive shall submit to a physical examination
by a
licensed physician mutually satisfactory to the Company and the Executive,
the cost of such examination to be paid by the Company, and the
determination of such physician shall be
conclusive.
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If
the
Executive's employment is terminated by the Company for Executive’s permanent
disability in accordance with this section, the Executive shall continue to
receive the Executive’s base salary and bonus, and the Company shall continue
medical and dental benefits for the Executive and the Executive’s eligible
family, by paying the premium for health insurance continuation coverage under
COBRA for the Executive and the Executive’s eligible family to the extent the
Executive elects COBRA coverage (or by continuing to contribute the employer
portion of the premium normally paid by the Company for its current employees),
for the applicable Severance Period. The Severance Period shall consist of
ninety (90) days from the date on which employment actually terminates pursuant
to this paragraph 5(g). Notwithstanding the foregoing, the Executive shall
only
become eligible for a Severance Period if the Executive is terminated for
permanent disability in accordance with this paragraph 5(g) at any time after
six (6) months from the date the Executive commenced employment under this
Agreement. The Executive acknowledges and agrees that the non-compete
restrictions set forth in Section 7 of this Employment Agreement will remain
in
full force and effect for the Severance Period. The sum, if any, payable to
the
Executive in respect of the Severance Period shall be payable in equal monthly
installments on the fifteenth (15th)
day of
each month in the Severance Period. Furthermore, the obligations imposed on
Executive with respect to confidentiality, non-disclosure and assignment of
rights to inventions or developments in this Agreement or any other agreement
executed by the parties shall continue, notwithstanding the termination of
the
employment relationship between the parties.
-10-
The
salary, bonus (if any) and health insurance benefits to be provided under this
Section 5(g) are sometimes hereinafter referred to as "Termination
Compensation." The Executive shall not be entitled to any Termination
Compensation unless the Executive executes and delivers to the Company after
a
notice of termination a general release in form and substance reasonably
satisfactory to the Company by which the Executive releases the Company from
any
obligations and liabilities of any type whatsoever including those under this
Agreement, except for the Company's obligations with respect to the Termination
Compensation, which general release shall not affect the Executive’s right to
indemnification, if any, for actions taken within the scope of the Executive’s
employment or the Executive’s rights in respect of the Executive’s vested stock
options, if any. The parties hereto acknowledge that the Termination
Compensation to be provided under this Section 5(g) is to be provided in
consideration for the general release. The Executive will not be entitled to
and
shall not receive any other compensation or benefits of any type following
the
effective date of termination, except such benefits as may be required to be
extended under applicable State or Federal law.
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(h)
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Termination
Due To Executive’s Death.
This Agreement will terminate immediately upon the Executive's death
and
the Company shall not have any further liability or obligation to
the
Executive, the Executive’s executors, heirs, assigns or any other person
claiming under or through the Executive’s estate, except as set forth in
this paragraph 5(h).
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The
Company shall pay any accrued but unpaid salary or bonuses through the date
of
termination to Executive’s estate. If the Executive's employment is terminated
by the Company for Executive’s death in accordance with this section, the
Executive’s estate shall continue to receive the Executive’s base salary and
bonus, and the Company shall continue medical and dental benefits for the
Executive’s eligible family, by paying the premium for health insurance
continuation coverage under COBRA for the Executive’s eligible family to the
extent the Executive’s estate elects COBRA coverage (or by continuing to
contribute the employer portion of the premium normally paid by the Company
for
its current employees), for the Severance Period. The Severance Period shall
consist of ninety (90) days from the date on which employment actually
terminates pursuant to this paragraph 5(h). Notwithstanding the foregoing,
the
Executive’s estate and the Executive’s family shall only become eligible for the
compensation and benefits of a Severance Period if the Executive is terminated
for death in accordance with this Section at any time after six (6) months
from
the date the Executive commenced employment under this Agreement. The sum,
if
any, payable to the Executive’s estate in respect of the Severance Period shall
be payable in equal monthly installments on the fifteenth (15th)
day of
each month in the Severance Period. Furthermore, the obligations imposed on
Executive with respect to assignment of rights to inventions or developments
in
this Agreement or any other agreement executed by the parties shall continue,
notwithstanding the termination of the employment relationship between the
parties.
-11-
The
salary, bonus (if any) and health insurance benefits to be provided under this
paragraph 5(h) are sometimes hereinafter referred to as "Termination
Compensation." The Executive’s estate and the Executive’s family shall not be
entitled to any Termination Compensation unless the Executive’s estate executes
and delivers to the Company after a notice of termination a general release
in
form and substance reasonably satisfactory to the Company by which the
Executive’s estate releases the Company from any obligations and liabilities of
any type whatsoever including those under this Agreement, except for the
Company's obligations with respect to the Termination Compensation, which
general release shall not affect the Executive’s estate’s right to
indemnification, if any, for actions taken within the scope of the Executive’s
employment or the Executive’s estate’s rights in respect of the Executive’s
vested Restricted Stock. The parties hereto acknowledge that the Termination
Compensation to be provided under this paragraph 5(h) is to be provided in
consideration for the general release. The Executive’s estate and the
Executive’s family will not be entitled to and shall not receive any other
compensation or benefits of any type following the effective date of
termination, except such benefits as may be required to be extended under
applicable State or Federal law.
|
(i)
|
Termination
of Employment; Expiration of the Agreement.
|
|
(i)
|
At
any time after notice to terminate this Agreement has been served
or
received by the Company, the Company, without being deemed in breach
of
this Agreement or being deemed to be taken steps which would constitute
grounds for a different kind of termination under this Agreement,
may
require the Executive to do the following during the applicable notice
period concluding on the effective date of termination of employment
under
this Agreement:
|
|
(1)
|
work
in a capacity consistent with the Executive’s then applicable position and
status other than that in which the Executive is employed under this
Agreement but without affecting the Executive’s fixed salary, including
benefits; and
|
|
(2)
|
remain
away from work and, although the Executive will continue to receive
the
Executive’s salary and benefits provided for under this Agreement during
such period, and the Company will not be obliged to provide the Executive
with any work although the Company may, in its absolute discretion,
assign
to the Executive during this period, from time to time, such appropriate
tasks or projects as may be carried out by the Executive away from
the
Company’s offices.
|
-12-
|
(ii)
|
Upon
termination of the Executive’s employment under this Agreement, the
Executive shall do the following:
|
|
(1)
|
forthwith
surrender to the Company, in good condition and working order (ordinary
wear and tear excepted), all Company property in the Executive’s
possession including, without limitation, all books, papers and other
documents (of whatever nature and in whatever media) belonging to
the
Company or its subsidiary or associated company or relating to the
business of the Company or its subsidiary or associated
companies;
|
|
(2)
|
if
the Executive is a director of the Company or of any subsidiary or
associated company, or if the Executive is an officer of any subsidiary
or
any associated company, and is so requested by the Company, resign
as an
officer or director, as the case may be, within forty-eight (48)
hours of
being so requested. Should the Executive fail to resign within forty-eight
(48) hours of being so requested, the Executive irrevocably authorizes
the
Company to appoint an agent in the Executive’s name and on the Executive’s
behalf to execute and deliver any documents and to take any and all
actions reasonably deemed by the Company to be necessary or appropriate
to
give effect to such resignation(s) by the Executive;
and
|
|
(3)
|
immediately
repay all outstanding debts or loans due to the Company and/or any
subsidiary or associated company, the Company being expressly authorized,
for purposes of clarity, to deduct from any wages or other payment
due or
which may become due to the Executive a sum in repayment of all or
any
part of any such debts or loans.
|
|
(iii)
|
Termination
of this Agreement as a consequence of the expiration of the Employment
Period (whether at the end of the initial term or any renewal term)
shall
not constitute a termination by the Executive or by the Company,
with or
without cause, and Executive shall not be entitled to severance or
other
continuation benefits whatsoever (other than as may be required by
law)
where the Agreement expires by its own terms. If the Agreement expires
at
the end of the Initial Term or any Renewal Term after proper advance
notice by either party of the Company’s or the Executive’s intent not to
renew, the Agreement shall expire and Executive shall not be entitled
to
any Termination Compensation or severance of any kind, except as
required
by law.
|
-13-
6. Company
Property. All
programs, files, correspondence, memoranda, notes, records, reports, documents,
software, programs, promotional materials, and other Company property, including
all copies, in whatever media the same may be prepared or retained, which come
into Executive’s possession by, through or in the course of Executive’s
employment, regardless of the source and whether created by Executive, are
the
sole and exclusive property of the Company. Executive agrees and covenants
that
Executive shall not remove or copy any such programs, files, correspondence,
memoranda, notes, records, reports, documents, software, programs, promotional
materials, and other Company property, including all copies, in whatever media
the same may be prepared or retained, or any of the information contained
therein or otherwise pertaining to the business of the Company without the
express written consent of the Company, who in all events shall be considered
to
be the owner and possessor of all such property. Executive covenants and agrees
that Executive shall in no way utilize any such information in Executive’s
possession for the gain or advantage of Executive and/or to the detriment of
the
Company. Upon termination or lapse of this Employment Agreement, or at such
earlier date as the Company may request, in any case upon written notice to
the
Executive, Executive immediately shall deliver to the Company all such programs,
files, correspondence, memoranda, notes, records, reports, documents, software,
programs, promotional materials, and other Company property, including all
copies, in whatever media the same may be prepared or retained. Notwithstanding
the foregoing, the Executive may keep, for Executive’s reference, a copy of all
memoranda, notes and documents prepared by Executive.
7. Non-Competition.
|
(a)
|
The
Executive agrees and acknowledges that, in connection with the Executive’s
employment with the Company, the Executive will be provided with
access to
and become familiar with confidential and proprietary information
and
trade secrets belonging to the Company. Executive further acknowledges
and
agrees that, given the nature of this information and trade secrets,
it is
likely that such information and trade secrets would inevitably be
used or
revealed, either directly or indirectly, in any subsequent employment
with
a competitor of the Company in any position comparable to the position
the
Executive holds with the Company under this Agreement. Accordingly,
in
consideration of the Executive’s employment with the Company pursuant to
this Agreement, and other good and valuable consideration, the receipt
of
which is hereby acknowledged, Executive agrees that, while the Executive
is in the employ of the Company and for a period equal to the greater
of
the Severance Period or six (6) months after the termination of the
Executive’s employment, except with the prior written agreement of the
Company (not to be unreasonably withheld) the Executive shall not,
either
on the Executive’s own behalf or on behalf of any third party, except on
behalf of the Company or any affiliate of the Company, directly or
indirectly:
|
-14-
|
(i)
|
Other
than through the Executive’s ownership of stock of the Company, if at all,
directly or indirectly, own, manage, operate, join, control, finance
or
participate in the ownership, management, operation, control, or
financing
of, or be connected as a proprietor, partner, stockholder, officer,
director, principal, agent, representative, joint venturer, investor,
lender, consultant or otherwise with, or use or permit the Executive’s
name to be used in connection with, any Business. For purposes of
this
Agreement, the term “Business” shall include any business or enterprise
engaged directly or indirectly in the acquisition, licensing, development,
manufacturing, marketing and distribution of microelectromechanical
systems, nanotechnology, products or services incorporating or utilizing
the same or products or services resulting from collaborations of
the
Company with Universities and research institutions to develop products
or
services incorporating or utilizing microelectromechanical systems
or
nanotechnology, and any other business engaged in by the Company
that
Executive is or has been directly involved with at any time during
the
twelve (12) month period leading up to the end of the Employment
Term.
Notwithstanding the foregoing, the Executive may perform services
for a
competitive business if both of the following conditions are fulfilled:
(i) such competitive business is also engaged in other lines of business;
and (ii) Executive's services are restricted to employment in such
other
lines of business. It is recognized by the Executive and the Company
that
the Business is and is expected to continue to be conducted throughout
the
United States and the world, and that more narrow geographical limitations
of any nature on this non-competition covenant (and the non-solicitation
provisions set forth in clauses (2) and (3) below) are therefore
not
appropriate. The foregoing restriction shall not be construed to
prohibit
the ownership by Executive as a passive investment of not more than
one
percent (1%) of any class of securities of any corporation which
is
engaged in any Business having a class of securities registered pursuant
to the Securities Exchange Act of 1934, as
amended.
|
|
(ii)
|
Attempt
in any manner to solicit from a current client or customer of the
Company
at the time of the Executive’s termination, business of the type performed
by the Company or to persuade any client of the Company to cease
to do
business or change the nature of the business or to reduce the amount
of
business which any such client has customarily done or actively
contemplates doing with the Company; or
|
|
(iii)
|
Recruit,
solicit or induce, or attempt to induce, any person or entity which,
at
the time of the termination of the Executive’s employment or at any time
during the six (6) month period prior to such termination was an
employee
of the Company or its affiliates, to terminate such employee’s employment
with, or otherwise cease such employee’s relationship with the Company or
its affiliates. As used in this Agreement, an affiliate of the Company
is
any person or entity that, directly or indirectly, through one or
more
intermediaries, controls, or is controlled by, or is under common
control
with, the Company.
|
-15-
|
(b)
|
The
parties agree that the relevant public policy aspects of covenants
not to
compete have been discussed, and that every effort has been made
to limit
the restrictions placed upon the Executive to those that are reasonable
and necessary to protect the Company's legitimate interests. Executive
acknowledges that, based upon the Executive’s education, experience, and
training, this non-compete provision will not prevent the Executive
from
earning a livelihood and supporting himself and the Executive’s family
during the relevant time period.
|
|
(c)
|
If
any restriction set forth in Section 7 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long
a period
of time or over too great a range of activities or geographic area,
it
shall be interpreted to extend over the maximum period of time, range
of
activities or geographic areas as to which it may be
enforceable.
|
|
(d)
|
The
restrictions contained in Section 7 are necessary for the protection
of
the business and goodwill of the Company and/or its affiliates and
are
considered by the Executive to be reasonable for such purposes. The
Executive agrees that any material breach of Section 7 will cause
the
Company and/or its affiliates substantial and irrevocable damage
and
therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right
to seek
specific performance and injunctive
relief.
|
|
(e)
|
The
provisions of Section 7 shall survive termination or expiration of
this
Agreement.
|
|
(f)
|
The
existence of a claim, charge, or cause of action by Executive against
the
Company shall not constitute a defense to the enforcement by the
Company
of the foregoing restrictive
covenants.
|
-16-
8. Protection
of Confidential Information.
|
(a)
|
The
Executive agrees that all information, whether or not in writing,
with
regard to the assets, property, business, technical or financial
affairs
of the Company and that is generally understood in the industry as
being
confidential and/or proprietary information (“Proprietary Information”)
including, but not limited to, ideas, concepts, inventions, improvements,
processes, products, services, designs, original works of authorship,
formulas, compositions of matter, compounds, computer software programs,
Internet products and services, testing and other data, databases,
mask
works, trade secrets, treatments, product improvements, product ideas,
new
products, discoveries, methods, software, uniform resource locators
or
proposed uniform resource locators (“URLs”), domain names or proposed
domain names, any trade names, trademarks or slogans, identity of
customers, contracts, technical and production know-how, developments,
formulae, devices, inventions, administrative procedures, source
code and
financial information, is the exclusive property of the Company.
The
Executive agrees to hold in a fiduciary capacity for the sole benefit
of
the Company all such Proprietary Information and any other secret,
confidential or proprietary information, knowledge, data, or trade
secrets
relating to the Company or any of its affiliates or their respective
clients (the foregoing being hereinafter referred to as "Confidential
Information"), which Confidential Information shall have been obtained
during the Executive’s employment with the Company. The Executive agrees
that the Executive will not at any time, either during the Term of
this
Agreement or after its termination, disclose to anyone any Confidential
Information, or utilize such Confidential Information for the Executive’s
own benefit, or for the benefit of third parties without written
approval
by the appropriate executive officer of the Company. Executive further
agrees that all memoranda, notes, records, data, schematics, sketches,
computer programs, prototypes, or written, photographic, magnetic
or other
documents or tangible objects compiled by the Executive or made available
to the Executive during the Employment Period concerning the property,
business, technical or financial affairs of the Company and/or its
clients, including any copies of such materials, shall be the property
of
the Company and shall be delivered to the Company on the termination
of
the Executive’s employment, or at any other time, upon the written request
of the Company. Notwithstanding the foregoing, the Executive may
keep, for
Executive’s reference, a copy of all memoranda, notes and documents
prepared by Executive.
|
In
the
event Executive is questioned by anyone not employed by the Company or by an
employee of or a consultant to the Company not authorized to receive such
information, in regard to any Confidential Information or any other secret
or
confidential work of the Company, or concerning any fact or circumstance
relating thereto, or in the event that Executive becomes aware of the
unauthorized use of Confidential Information by any party, whether competitive
with the Company or not, Executive will promptly
notify
the appropriate executive officer of the Company
designated to receive such notifications. Until further written notice, such
person shall be the Senior Vice President for Strategic Transactions and
Planning or, in the absence of such person, the President or Chief Executive
Officer of the Company. Notwithstanding the foregoing, the Executive may discuss
any fact or circumstances relating to any Confidential Information with
attorneys the Executive may retain in connection with this Agreement or with
the
subject matter thereof, provided that said attorneys shall agree in writing
reasonably satisfactory in form and substance to the Company to maintain the
confidentiality of such information in accordance with this Agreement and to
not
use or disclose the same except as permitted hereunder.
-17-
In
the
event that, at any time during the Executive’s employment with the Company or at
any time thereafter, Executive receives a request to disclose all or any part
of
the Confidential Information under the terms of a subpoena or order issued
by a
court or by a governmental body, Executive agrees to notify the Company
immediately of the existence, terms, and circumstances surrounding such request,
to consult with the Company on the advisability of taking legally available
steps to resist or narrow such request; and, if disclosure of such trade secrets
and other proprietary and confidential information is required to prevent
Executive from being held in contempt or subject to other penalty, to furnish
only such portion of the trade secrets and other proprietary and confidential
information as, in the written opinion of counsel reasonably satisfactory to
the
Company, Executive is legally compelled to disclose, and to exercise Executive’s
best efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to the disclosed trade secrets and other proprietary
and confidential information. The Company covenants and agrees to reimburse
the
Executive for all reasonable attorneys’ fees and expenses incurred by the
Executive in complying with this paragraph.
|
(b)
|
The
parties agree that the relevant public policy aspects of confidentiality
agreements have been discussed, and that every effort has been made
to
limit the restrictions placed upon the Executive to those that are
reasonable and necessary to protect the Company's legitimate
interests.
|
|
(c)
|
If
any restriction set forth in Section 8 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long
a period
of time or over too great a range of activities or geographic area,
it
shall be interpreted to extend over the maximum period of time, range
of
activities or geographic areas as to which it may be
enforceable.
|
|
(d)
|
The
restrictions contained in Section 8 are necessary for the protection
of
the business, assets and goodwill of the Company and/or its affiliates
and
are considered by the Executive to be reasonable for such purposes.
The
Executive agrees that any material breach of Section 8 will cause
the
Company and/or its affiliates substantial and irrevocable damage
and
therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right
to seek
specific performance and injunctive relief.
|
|
(e)
|
The
provisions of Section 8 shall survive termination or expiration of
this
Agreement.
|
-18-
|
(f)
|
The
existence of a claim, charge, or cause of action by Executive against
the
Company shall not constitute a defense to the enforcement by the
Company
of the foregoing restrictive
covenants.
|
9. Intellectual
Property.
|
(a)
|
Disclosure
of Inventions; Assignment of Ownership to Company.
Executive
acknowledges and agrees that as part of Executive’s employment pursuant to
this Employment Agreement, Executive is expected to make new contributions
of value to the Company, and Executive agrees that Executive will
promptly
disclose in confidence to the Company all ideas, concepts, inventions,
improvements, processes, products, designs, original works of authorship,
formulas, processes, compositions of matter, compounds, computer
software
programs, Internet products and services, e-commerce products and
services, e-entertainment products and services, testing and other
data,
databases, mask works, trade secrets, treatments, product improvements,
product ideas, new products, discoveries, methods, software, uniform
resource locators or proposed uniform resource locators (“URLs”), domain
names or proposed domain names, any trade names, trademarks or slogans,
which may or may not be subject to or able to be patented, copyrighted,
registered, or otherwise protected by law, which relate directly
or
indirectly to the Company's business or current or anticipated research
and development or the business of any of its affiliates or their
respective clients, or which were developed by the Executive through
the
use of trade secrets of the Company or material use of equipment,
supplies
or facilities of the Company (the “Inventions”) that Executive makes,
conceives or first reduces to practice or creates, either alone or
jointly
with others, during the period of the Executive’s employment, whether or
not in the course of the Executive’s employment, and whether or not such
Inventions are patentable, copyrightable or able to be protected
as trade
secrets, or otherwise able to be registered or protected by law.
The
Executive agrees that all such Inventions shall be the sole and exclusive
property of the Company and are hereby assigned by Executive to the
Company from the moment of their creation and fixation in tangible
media.
Furthermore, the Executive agrees that the Executive will, at the
Company's request and cost, do whatever is reasonably necessary to
secure
for the Company the rights thereto by patent, copyright or otherwise.
Executive acknowledges and agrees that the Executive’s obligations with
respect to Company property discussed in this paragraph shall survive
the
termination or expiration of this
Agreement.
|
|
(b)
|
Work
for Hire.
Executive
acknowledges and agrees that any copyrightable works prepared by
the
Executive within the scope of the Executive’s employment are “works for
hire” under the Copyright Act and that the Company will be considered the
author and owner of such copyrightable works. The Executive agrees
that
the Executive will, at the Company's request and cost, do whatever
is
reasonably necessary to secure for the Company the rights thereto.
Executive acknowledges and agrees that the Executive’s obligations with
respect to Company’s property discussed in this paragraph shall survive
the termination or expiration of this
Agreement.
|
-19-
|
(c)
|
Assignment
of Other Rights.
In
addition to the foregoing assignment of Inventions to the Company,
Executive hereby irrevocably transfers and assigns to the
Company:
|
|
(i)
|
all
worldwide patents, patent applications, copyrights, mask works, trade
secrets and other intellectual property rights in any Invention;
and
|
|
(ii)
|
any
and all “Moral Rights” (as defined below) that Executive may have in or
with respect to any Invention.
|
Executive
also hereby forever waives and agrees never to assert any and all Moral Rights
Executive may have in or with respect to any Invention, even after termination
of the Executive’s work on behalf of the Company. “Moral Rights” mean
any
rights to claim authorship of an Invention, to object to or prevent the
modification of any Invention, or to withdraw from circulation or control the
publication or distribution of any Invention, and any similar right, existing
under judicial or statutory law of any country in the world, or under any
treaty, regardless of whether or not such right is denominated or generally
referred to as a “moral right.”
|
(d)
|
Assistance.
Executive
agrees to assist the Company in every proper way to obtain for the
Company
and enforce patents, copyrights, mask work rights, trade secret rights
and
other legal protections for the Company’s Inventions in any and all
countries. Executive will execute any documents that the Company
may
reasonably request for use in obtaining or enforcing such patents,
copyrights, mask work rights, trade secrets and other legal protections.
The Executive’s obligations under this Section will continue beyond the
termination of the Executive’s employment with the Company, provided that
the Company will compensate the Executive at a reasonable rate after
such
termination for time or expenses actually spent by the Executive
at the
Company’s request on such assistance. Executive appoints the Secretary of
the Company as the Executive’s attorney-in-fact to execute documents on
the Executive’s behalf for this
purpose.
|
10. Publicity.
Neither
party shall issue, without consent of the other party, which consent shall
not
be unreasonably withheld, any press release or make any public announcement
with
respect to this Agreement or the employment relationship between them
provided,
that
nothing herein shall preclude the Company from making such disclosures as may
be
reasonably necessary or appropriate in order to comply with applicable
securities laws, rules and regulations. Following the date of this Agreement
and
regardless of any dispute that may arise in the future, the Executive and the
Company jointly and mutually agree that they will not disparage, criticize
or
make statements which are negative, detrimental or injurious to the other to
any
individual, company or client, including within the Company.
-20-
11. Binding
Agreement.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their heirs, personal representatives, successors and assigns. In the event
the
Company is acquired, is a non surviving party in a merger, or transfers
substantially all of its assets, this Agreement shall not be terminated and
the
Executive and the transferee or surviving company shall be bound by the
provisions of this Agreement. The parties understand that the obligations of
the
Executive are personal and may not be assigned by the Executive.
12. Entire
Agreement.
This
Agreement contains the entire understanding of the Executive and the Company
with respect to employment of the Executive and supersedes any and all prior
understandings, written or oral. This Agreement may not be amended, waived,
discharged or terminated orally, but only by an instrument in writing,
specifically identified as an amendment to this Agreement, and signed by all
parties. By entering into this Agreement, the Executive certifies and
acknowledges that the Executive has carefully read all of the provisions of
this
Agreement and that the Executive voluntarily and knowingly enters into said
Agreement.
13. Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be deemed severable from the
remainder of this Agreement, and the remaining provisions contained in this
Agreement shall be construed to preserve to the maximum permissible extent
the
intent and purposes of this Agreement.
14. Tax
Consequences.
Company
will have no obligation to any person or entity entitled to the benefits of
this
Agreement with respect to any tax obligation any such person or entity incurs
as
a result of or attributable to this Agreement, including all supplemental
agreements and employee benefits plans incorporated by reference therein, or
arising from any payments made or to be made under this Agreement or
thereunder.
15. Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York applicable to contracts negotiated, executed
and to be performed wholly within the State of New York, without giving effect
to the principles of conflicts of law or choice of law thereof.
16. Submission
to Jurisdiction.
Each of
the parties hereto hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of the State and Federal Courts sitting in New York,
New
York for purposes of any suit, action or other proceeding arising out of this
Agreement and agrees not to commence any action, suit or proceedings relating
hereto except in such courts. Each of the parties hereto agrees that service
of
any process, summons, notice or document by U.S. registered mail at its address
set forth herein shall be effective service of process for any action, suit
or
proceeding brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement, which
is
brought by or against it, in such courts, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
-21-
17. Notices.
Any
notice provided for in this Agreement shall be provided in writing. Properly
addressed notices shall be effective from the date of service, if served
personally on the party to whom notice is to be given, on the date of delivery
if delivered to the appropriate address by in-person delivery or courier or
by
an overnight courier (including, without limitation, Federal Express, UPS and
Express Mail), or on the fifth (5th)
day
after mailing via the U.S. Postal Service, if mailed by First Class mail,
postage prepaid. Notices shall be properly addressed to the parties at their
respective addresses or to such other address as either party may later specify
by notice to the other.
18. Indemnification.
|
(a)
|
The
Company shall indemnify and hold harmless the Executive to the fullest
extent permitted by law from and against any and all claims, damages,
expenses (including reasonable attorneys' fees), judgments, penalties,
fines, settlements, and all other liabilities incurred or paid by
the
Executive in connection with the investigation, defense, prosecution,
settlement or appeal of any threatened, pending or completed action,
suit
or proceeding, whether civil, criminal, administrative or investigative
and to which the Executive was or is a party or is threatened to
be made a
party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or
not
done by the Executive in any such capacity or capacities, provided
that
the Executive acted in good faith, in a manner that was not grossly
negligent and did not constitute willful misconduct and in a manner
the
Executive reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action
or
proceeding, had no reasonable cause to believe the Executive's conduct
was
unlawful. The Company also shall pay any and all reasonable expenses
(including attorney's fees) incurred by the Executive as a result
of the
Executive being called as a witness in connection with any matter
involving the Company and/or any of its officers or directors (other
than
an action or suit by the Company against the
Executive).
|
|
(b)
|
The
Company shall pay any reasonable expenses (including attorneys' fees),
judgments, penalties, fines, settlements, and other liabilities incurred
by the Executive in investigating, defending, settling or appealing
any
action, suit or proceeding described in this Section 18 (other than
an
action or proceeding by the Company against the Executive) in advance
of
the final disposition of such action, suit or proceeding. The Company
shall promptly pay the amount of such expenses to the Executive,
but in no
event later than ten (10) days following the Executive's delivery
to the
Company of a written request for an advance pursuant to this Section
18,
together with a reasonable accounting of such
expenses.
|
-22-
|
(c)
|
The
Executive hereby undertakes and agrees to repay to the Company any
advances made pursuant to this Section 18 if and to the extent that
it
shall ultimately be agreed by the parties or determined by a court
that
the Executive is not entitled to be indemnified by the Company for
such
amounts.
|
|
(d)
|
The
Company shall make the advances contemplated by this Section 18 regardless
of the Executive's financial ability to make repayment, and regardless
of
whether indemnification of the Executive by the Company will ultimately
be
required. Any advances and undertakings to repay pursuant to this
Section
18 shall be unsecured and interest-free.
|
19. Miscellaneous.
|
(a)
|
No
delay or omission by either party to this Agreement in exercising
any
right of such party under this Agreement shall operate as a waiver
of that
or any other right by such party. A waiver or consent given by a
party to
this Agreement on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right
on any
other occasion.
|
|
(b)
|
The
captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or
substance of any section of this
Agreement.
|
|
(c)
|
The
language in all parts of this Agreement will be construed, in all
cases,
according to its fair meaning, and not for or against either party
hereto.
The parties acknowledge that each party and its counsel have reviewed
and
revised this Agreement and that the normal rule of construction to
the
effect that any ambiguities are to be resolved against the drafting
party
will not be employed in the interpretation of this
Agreement.
|
20. Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
be
deemed an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. Facsimile signatures shall be treated as if
the
same were original signatures.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-23-
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly
executed and delivered by its authorized officers or individually, as of the
date first written above.
| ADVANCE NANOTECH, INC. | ||
| |
|
|
| By: | ||
|
XXXXXX
XXXXXXX
Duly
Authorized
EXECUTIVE
|
||
|
XXXXXXX XXXXXXXXX, XX. |
||
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