EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into on
the first day of January 2002 by and between BioLase Technology, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxx ("Executive").
RECITALS
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WHEREAS, the Company desires to employ Executive as its President and
Chief Executive Officer, and Executive is willing to accept such employment on
certain terms and conditions;
WHEREAS, the Company and Executive desire to formalize the terms and
conditions of such employment;
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing premises, the terms
and conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Employment and Duties.
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(a) The Company hereby employs Executive as its President and Chief
Executive Officer, and Executive accepts such employment. In such capacity,
Executive shall report and be responsible to the Company Board of Directors
("Board") and shall perform such duties and functions as may be assigned to
Executive from time to time by the Board. Executive shall comply with all proper
directives and instructions of the Board, as embodied in resolutions adopted by
the Board.
(b) Executive agrees during the term of his employment hereunder to
devote his entire business time and attention to the performance of his duties
hereunder and to serve the Company diligently and to the best of his ability.
2. Compensation. For all services to be rendered by Executive
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hereunder, the Company shall pay Executive a base salary at the rate of Two
Hundred Forty Thousand Dollars ($240,000) per year. Executive's salary shall be
paid on such basis as is the normal payment pattern for executive officers of
the Company but no less frequently than monthly. Part of the total compensation
may be in the form of a fee for consulting services to BIOLASE Europe as long as
the total compensation does not exceed $240,000 per year.
In addition to the base salary, the Company shall pay to Executive an
annual bonus equal to 0.5% (one-half of one percent) of all sales over
$10,000,000 (ten million dollars) per year for the years 2002 and 2003. In lieu
of a bonus for 2001, the Company will pay Executive for the year 2002 a housing
allowance of $3,500 (three thousand five hundred dollars) per month to
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compensate Executive for expenses related to maintaining a dual residence away
from his permanent residence in Wyoming.
3. Options. The Board has authorized the grant to Executive of options
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to purchase up to 300,000 shares of BioLase Common Stock at an exercise price
equal to the fair market value (as determined in accordance with the provisions
of the Company's 1998 Stock Option Plan) of a share of Company Common Stock on
December 20, 2001. The options will be embodied in a stock option agreement in
the standard form employed or to be employed under the Company's 1998 Stock
Option Plan, modified to be consistent with the terms of this Agreement, and
will vest and become exercisable with respect to increments of the grant as
follows: 12,500 (twelve thousand five hundred) shares on the last day of each
calendar month during the term hereof commencing January 31, 2002 and continuing
through December 31, 2003. It is intended that such options shall be
non-qualified stock options (within the meaning of the Internal Revenue Code).
In the event Executive's employment with the Company is terminated by
the Company other than For Cause (as hereinafter defined), options shall
continue to vest for the longer of (a) the balance of the calendar year in which
termination occurs or (b) six months following termination.
4. Benefits. Executive shall be entitled to such fringe benefits and
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perquisites as are generally made available to executive officers of the Company
from time to time, including continuance of the auto allowance approved by the
Board in May of 2001. In addition, Executive shall be entitled to four weeks of
paid vacation per annum, but unused vacation time may not be carried over from
one calendar year to the next calendar year.
5. Reimbursement of Expenses. The Company shall reimburse Executive
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for all reasonable business expenses incurred by Executive in connection with
the performance of his duties hereunder, provided that Executive furnishes to
Company receipts and other documentation evidencing such expenditures. Such
the reimbursement shall include expenses, not to exceed $7,500 per year, related
to reasonable periodic travel between Executive's permanent residence in Wyoming
and the Company's principal executive offices located in San Clemente,
California.
6. Non-Competition.
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(a) Executive agrees during the term of his employment by the Company
not to compete with the Company or any of its Subsidiaries in any manner
whatsoever. Without limiting the generality of the foregoing, Executive shall
not, during the term of his employment by the Company, directly or indirectly
(whether for compensation or otherwise), alone or as an agent, principal,
partner, officer, employee, trustee, director, shareholder or in any other
capacity, own, manage, operate, join, control or participate in the ownership,
management, operation or control of or furnish any capital to or be connected in
any manner with or provide any services as a consultant for any business which
competes directly or indirectly with any of the businesses of the Company or any
of its Subsidiaries as they may be conducted from time to time; provided,
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however, that nothing contained in this Agreement shall be deemed to preclude
Executive from owning not more than one-half of one percent (0.5%) of the
capital stock of a publicly-traded entity which is in competition with any of
such businesses.
(b) Executive may engage in civic, educational and charitable
activities. Executive shall be entitled, with the approval of the Board, to
serve as a director of any corporation other than a corporation which, in the
good faith opinion of the Board, is in competition with the Company or a
Subsidiary. Executive shall be entitled to receive compensation from any
corporation with respect to which he serves as a director in accordance with
this Section 6(b). Notwithstanding anything to the contrary set forth herein,
Executive shall not be entitled to engage in any of the activities set forth in
this Section 6(b) if such activities, in the good faith opinion of the Board,
interfere or could reasonably be expected to interfere with Executive's
performance of his duties and activities under this Agreement.
(c) Executive shall promptly disclose to the Company and shall use his
best efforts to transfer to or hold for the benefit of the Company but in no
event shall divert or exploit for his own personal profit or that of any other
person except the Company, any business opportunity or other opportunity to
acquire an interest in or a contractual relationship with any person or entity
where such person or entity is in the same line of business as the Company or a
Subsidiary or where such contractual relationship would be considered a feasible
and advantageous opportunity for the Company or a Subsidiary.
7. Term of Agreement.
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(a) The basic term of Executive's employment with the Company hereunder
shall commence on January 1, 2002 and, except in the event of earlier
termination, shall end on December 31, 2003. Following December 31, 2003, the
employment relationship under this Agreement shall continue on a calendar
quarter to calendar quarter basis with the same remuneration arrangements as
shall apply during the final year of the term hereof, unless and until (i) the
employment relationship between Executive and the Company shall become governed
by a written instrument executed by Executive and the Company subsequent to the
date hereof, including an instrument amending, renewing or extending this
Agreement, or (ii) this Agreement shall have been terminated on December 31,
2003 or a calendar quarter-end thereafter by notice of the termination hereof
given by one party hereto to the other at least ninety (90) days prior to the
date specified in such notice for such termination.
(b) The Company upon written notice to Executive may terminate this
Agreement For Cause (as defined herein). For the purposes of this Agreement, the
term "For Cause" shall mean: (i) Executive's conviction by, or entry of a plea
of guilty or nolo contenders in, a court of competent jurisdiction for any crime
involving moral turpitude or any felony punishable by imprisonment in the
jurisdiction involved; (ii) the repeated failure by Executive to perform his
duties and functions hereunder in accordance with the instructions of the Board
as embodied in resolutions of the Board (provided that such instructions do not
require Executive to take any actions that are unlawful or otherwise improper);
(iii) the willful and material breach of this Agreement by Executive if
Executive fails to cure such breach within 15 business days following
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written notice from the Company; or (iv) Executive's commission of any act of
fraud or dishonesty in connection with his employment by the Company.
(c) In the event the Company terminates the employment of Executive
prior to January 1, 2003 other than For Cause, the Company shall pay to
Executive as severance pay and in lieu of any other salary or bonus payments
hereunder with respect to post-termination periods an amount equal to twelve
(12) times the base monthly salary Executive was receiving immediately prior to
the date of termination. In the event the Company terminates the employment of
Executive subsequent to December 31, 2002 other than For Cause, the Company
shall pay to Executive as severance pay and in lieu of any other salary or bonus
payments hereunder with respect to post-termination periods an amount equal to
at least six (6) times the base monthly salary Executive was receiving
immediately prior to the date of termination, and in such case the sum of (i)
the number of months between the notice of termination and the date of
termination of employment and (ii) the number of months with respect to which
such severance pay is paid shall be no less than twelve (12).
8. Confidentiality.
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(a) The Company (which for purposes of this Section 8 shall mean the
Company and its Subsidiaries) and Executive recognize that during the course of
Executive's employment with the Company he will accumulate certain crucial
proprietary and confidential information and trade secrets for use in the
Company's business and will have divulged to him certain crucial confidential
and proprietary information and trade secrets about the businesses, operations
and prospects of the Company, including, without limitation, confidential and
proprietary information regarding the technology, finances, customers, suppliers
and employees of the Company, which constitute valuable business assets
providing the Company with a competitive advantage over those who do not know
such information or have access to it. Executive hereby acknowledges and agrees
that such information (the "Proprietary Information") is confidential and
proprietary and constitutes trade secrets; that the Proprietary information
belongs to the Company and not to Executive; that such information includes,
without limitation:
(i) The identity and location of customers and suppliers;
(ii) Records of research, including research relating to the
Technology;
(iii) Plans, proposals and projections, including but not limited
to plans for the growth, expansion and development of the company's various
businesses and their respective relationships with their employees, suppliers
and customers; and
(iv) Files, reports, memoranda, computer software or programming
and budgets or other financial plans or information regarding the Company and
its business, properties or affairs.
(b) Executive agrees that he shall not, at any time subsequent to the
execution of this Agreement, whether during or after the term hereof, disclose,
divulge or make known, directly or indirectly, to any person, or otherwise use
or exploit in any manner any Proprietary
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Information obtained by Executive at any time during his employment by the
Company, except in connection with and to the extent required by his performance
of his duties hereunder for the Company. Executive agrees to advise the Company
promptly of the identity and nature of any contacts with any person or entity
soliciting from Executive disclosure of any Proprietary Information or
soliciting Executive's involvement in any business venture competitive with the
Company. Upon termination of this Agreement, Executive shall deliver to the
Company all tangible displays and repositories of Proprietary Information,
including without limitation customer and supplier lists, files, records of
research, proposals, reports, memoranda, business methods and techniques,
computer software and programming, budgets and other financial plans and
information, and other materials or records or writings of any other type
(including all copies thereof) made, used or obtained by, or provided to,
Executive, containing any Proprietary Information, whether obtained prior to or
subsequent to the execution of this Agreement.
9. Miscellaneous.
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(a) Executive represents and warrants to the Company that he is not now
under any obligation of a contractual or other nature to any person, firm or
corporation which is inconsistent or in conflict with this Agreement, or which
would prevent, limit or impair in any way the performance by him of his
obligations hereunder.
(b) The waiver by either party of a breach of any provision of this
Agreement must be in writing and shall not operate or be construed as a waiver
of any subsequent breach thereof. (c) This Agreement constitutes the entire
Agreement of Executive and the Company regarding employment and supersedes all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations between the parties with respect to the subject matter hereof.
(d) Any and all notices referred to herein shall be sufficiently
furnished if in writing and personally delivered or sent by registered or
certified mail, postage prepaid with return receipt requested, by facsimile
transmission (if receipt is confirmed) or by courier to the Company at its
principal executive office and to the Executive at his address as reflected in
the Company's employment records or such other address as a party may from time
to time designate in writing in the manner set forth in this Section 9(d):
(e) If any portion or provision of this Agreement shall be invalid or
unenforceable for any reason, there shall be deemed to be made such changes (and
only such changes) in such provision or portion as are necessary to make it
valid and enforceable. The invalidity or unenforceability of any provision or
portion of this Agreement shall not affect the validity or enforceability of any
other provision or portions of this Agreement. If any such unenforceable or
invalid provision or provisions shall be rendered enforceable and valid by
changes in applicable law, then such provision or provisions shall be deemed to
read as they presently do in this Agreement without change.
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(f) The rights and obligations of the parties hereto shall inure to and
be binding upon the parties hereto and their respective heirs, successors and
assigns. Without limiting the generality of the foregoing, this Agreement shall
be binding upon any successor to the Company whether by merger, acquisition of
stock, purchase of all or substantially all of the Company's assets,
reorganization or otherwise. Executive may not assign his rights and duties
hereunder, except with the prior written consent of the Company.
(g) This Agreement is intended to and shall be governed by, and
interpreted under and construed in accordance with, the laws of the State of
California applicable to contracts executed in and wholly performed with such
state and without reference to any choice or conflict of laws principles. The
payment of base compensation, bonus or benefits may be allocated to or made by
such divisions or subsidiaries of the Company as appropriate.
(h) Any controversy, claim or dispute between the parties directly or
indirectly concerning this Agreement, or the breach or subject matter hereof,
shall be finally settled by arbitration held in Orange County, California.
Either party may demand an arbitration proceeding by providing the other party
and the American Arbitration Association with written notice thereof. The
Company and Executive shall each select one arbitrator from a panel of at least
five (5) arbitrators (the "Arbitration Pool") obtained from the American
Arbitration Association within thirty (30) days of receiving the Arbitration
Pool list. Such two arbitrators so selected shall agree on a third arbitrator
from the Arbitration Pool within fifteen (15) days thereafter. In the event an
agreement has not been reached on the third arbitrator by the end of such
fifteen-day period, the American Arbitration Association shall choose the third
arbitrator.
The parties hereto agree that an action to compel arbitration pursuant to
this Agreement may be brought in any appropriate court, and in connection
therewith the laws of the State of California shall control. Application may
also be made to any such court for confirmation of any decision or award of the
arbitrators but only if necessary to effectuate such decision or award. The
parties hereto hereby consent to the jurisdiction of the arbitrators and waive
any objection to the jurisdiction of such arbitrators.
If any arbitration, litigation or other proceedings is instituted in
connection with or related to this Agreement, the non-prevailing party in such
proceeding shall pay the expenses, including without limitation the attorneys'
fees and expenses of investigation, of the prevailing party.
(i) The Company and Executive represent, respectively, that it and he
have not obligated the Company to pay any fee to any person in connection with
the employment of Executive by the Company.
10. Indemnification. The Company shall, to the maximum extent permitted
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under the General Corporation Law of the State of Delaware, indemnify Executive
against any expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement (with the written consent of the Company which shall not be
unreasonably withheld) actually and reasonably incurred by Executive in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, threatened or initiated against Executive by
reason of the fact that
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he was serving as an officer, director, employee or agent of the Company or was
serving at the request of the Company as an officer, director, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BioLase Technology, Inc.
By: /s/ XXXXXXXX XXXXXXXXXX
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Xxxxxxxx Xxxxxxxxxx,
Chairman of the Board
By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
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