EXHIBIT 10.6
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
the 1st day of November, 1999, by and between Xxxxxxxx Xxxxxxxxxx ("Employee")
and Optical Communication Products, Inc., a California corporation ("Company").
RECITALS:
1. The Company has been formed for the purpose of developing,
manufacturing and selling optical communication interface components and
subsystems for use in optical fiber interface components and subsystems for use
in optical fiber communications systems.
2. Employee has previous experience in the businesses conducted
and to be conducted by the Company and is a stockholder of the Company.
COVENANTS:
In consideration of the recitals and mutual covenants contained
herein, the parties agree that:
1. The Company will employ Employee to serve as Chief Operating
Officer, Vice President of Manufacturing and Research and Development, in
connection with the Company's operations and Employee does hereby accept such
employment, all subject to the terms and provisions of this Agreement. Employee
represents that he is legally free to enter into this agreement and that it does
not conflict with any of his duties or obligations to any other person and that
he is not in any way restricted by any duties or obligations to any other person
from contributing his full knowledge and talents to the Company in performing
his duties hereunder.
2. This Agreement shall have an initial one-year term, which
shall be automatically renewed each year unless the Company, upon thirty (30)
days prior written notice, notifies Employee of its intent not to renew the
Agreement, with the consequences hereinafter set forth. Notwithstanding the
foregoing, the Company or the Employee may at any time terminate this Agreement
and the employment relationship on thirty (30) days' prior written notice to the
other, with the consequences hereinafter set forth.
3. During the year ending 2000, the Company agrees to compensate
Employee (from the commencement of this Agreement) at the rate of not less than
$163,047 per year from which the Company shall withhold and deduct all
applicable federal and state income, social security and disability taxes as
required by applicable laws. Thereafter, Employee's annual compensation shall be
subject to annual review and shall be established by the Board of Directors of
the Company, but in no event shall Employee's minimum compensation be reduced
below $163,047 per year. Such compensation shall be payable every two weeks or
on such other basis as the Company may establish.
4. Annual bonuses may be paid to Employee in the discretion of
the Company's Board of Directors, but this paragraph should not be construed as
creating any duty on the part of the Company to declare or pay any bonuses to
Employee.
5. Employee agrees to devote his entire working time, attention
and energies to the business of the Company and agrees to perform such
reasonable responsibilities and duties as may be assigned to him from time to
time by the Company's Board of Directors, which shall be consistent with his
position as Chief Operating Officer, Vice President of Manufacturing and
Research and Development. In no event shall the Employee be precluded from
activities in professional societies, or from lecturing or writing in areas of
his professional expertise, for reasonable periods and Employee shall be
entitled to retain honoraria, publication royalties and similar compensation
paid as a result of such activities.
6. Employee shall be entitled to reimbursement by the Company for
such customary, ordinary and necessary business expenses as are incurred by him
in the performance of his duties and activities associated with promoting or
maintaining the business of the Company. All expenses as described in this
paragraph will be reimbursed only upon presentation by Employee of such
documentation as may be reasonably necessary to substantiate that all such
expenses were incurred in the performance of his duties.
7. Upon the termination of Employee's employment with the
Company and the concurrent or subsequent sale or other disposition by the
Employee of all of Employee's shares of stock in the Company, Employee agrees to
refrain from carrying on a business similar to Company's business within any
county or counties in which Company has done and continues to do business, for a
period of six months or, if Employee's employment is terminated pursuant to
Paragraph 12 (e) or 12 (f), then for as long as the Employee receives salary
payments from the Company.
8. As a condition of employment under this Agreement, Employee
shall execute the "Proprietary Rights and Confidentiality Agreement" attached
hereto as Exhibit A and made a part hereof by this reference.
9. During the term of this Agreement, Employee will undertake
no planning for or organization of any business activity competitive with the
work he performs as an employee of the Company, and Employee will not combine or
conspire with other employees of the Company for the purpose of organization of
any such competitive business activity. Employee acknowledges that he has no
confidentiality obligations whatsoever continuing to any previous employer and
relating to the business or proposed business of the Company.
10. Employee agrees to execute any and all documents and take
any and all other actions necessary or desirable for the assignment to the
Company of all of his interests in any patents or patentable ideas developed by
him, alone or in conjunction with others, in the course of his employment by the
Company.
11. The parties hereto agree and acknowledge that many of the
rights conveyed by this Agreement are of a unique and special nature and that
the Company will not have an adequate remedy at law in the event of failure of
Employee to abide by its terms and
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conditions, nor will money damages adequately compensate for such injury. It is,
therefore, agreed between the parties that in the event of breach by Employee of
Employee's agreement contained in paragraphs 7, 8, or 9 of this Agreement, the
Company shall have the rights, among other rights, to damages sustained thereby
and to a preliminary or permanent injunction to restrain Employee from the
prohibited acts. Employee agrees that this Paragraph (and Paragraphs 7, 8 and 9
as and to the extent referred to in this paragraph) shall survive the
termination of his employment for a period of six months or, if Employee's
employment is terminated pursuant to Paragraph 12(e) or 12(f), then for as long
as the Employee receives salary payments from the Company. Nothing herein
contained shall in any way limit or exclude any and all other rights granted by
law or equity to the Company.
12. a. If the Company provides notice to Employee of its
intent not to renew the Agreement, as provided in Paragraph 2 of the Covenants
to this Agreement, Employee shall be entitled to payment of an amount equal to
Employee's salary and benefits at the time of termination for a period of one
year from the date of termination. Other than payment of this amount, the
Company shall have no further obligation to pay Employee any compensation or
benefits whatsoever.
b. This Agreement shall be terminated upon the death of
Employee. In such event, Employee shall be entitled to payment of Employee's
salary and benefits through one month after the date of Employee's death. Other
than payment of this amount, the Company shall have no further obligation to pay
Employee any compensation or benefits whatsoever.
c. If, in the sole opinion of the Company's Board of
Directors, Employee shall be prevented from properly performing his duties
hereunder by reason of any physical or mental incapacity or disability, for a
period of more than one hundred and twenty (120) days in the aggregate in any
twelve-month period, then, to the extent permitted by law, his employment with
the Company shall terminate. Employee shall be entitled in such event to payment
of Employee's salary and benefits through one month after the effective date of
termination upon disability. Other than payment of this amount, the Company
shall have no further obligation to pay Employee any compensation or benefits
whatsoever.
d. The Company reserves the right to terminate this
agreement immediately, at any time, if, in the reasonable opinion of the
Company's Board of Directors: Employee breaches or neglects the duties which he
is required to perform under the terms of this Agreement; commits any material
act of dishonesty, fraud, misrepresentation or other act of moral turpitude; is
guilty of gross carelessness or misconduct; fails to obey the lawful direction
of the Company's Board of Directors; or acts in any way that has a direct,
substantial and adverse effect on the Company's reputation. The Company's total
liability to Employee in the event of termination of Employee's employment under
this section shall be limited to the payment of Employee's salary and benefits
through the effective date of termination.
e. The Company reserves the right to terminate this
Agreement without cause, and for any reason whatsoever, upon 30 days' notice to
Employee. Upon termination under this subsection, Employee shall receive payment
of an amount equal to Employee's salary and benefits at the time of termination
for a period of one year from the date
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of termination. Other than payment of this amount, the Company shall have no
further obligation to pay Employee any compensation or benefits whatsoever.
f. This Agreement may be terminated upon mutual written
consent of the Company and Employee. Upon termination under this subsection,
Employee shall receive payment of an amount equal to Employee's salary and
benefits at the time of termination for a period of six months from the date of
termination. Other than payment of this amount, the company shall have no
further obligation to pay Employee any compensation or benefits whatsoever.
g. Upon termination of employment for any reason
whatsoever, Employee shall be deemed to have resigned from all offices then held
with the Company.
13. This Agreement and the documents referred to herein contain
the entire agreement of the parties relevant to the subject matter hereof, and
it may be amended only by a written document signed by all parties to this
agreement who are affected by the amendment.
14. This Agreement shall be governed by the laws of the State of
California, the principal place of business of the company.
15. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall, nevertheless, continue in full force and effect without being
impaired or invalidated in any way.
16. The parties hereto shall not be deemed to have waived any
of their respective rights under this Agreement unless the waiver is in writing
and signed by such waiving party. No delay in exercising any right shall be a
waiver nor shall a waiver on one occasion operate as a waiver of such right on a
future occasion.
17. All notices provided for herein shall be in writing and shall
be deemed to have been given when delivered personally, when deposited in the
United States mail, registered or certified, postage prepaid, or when delivered
to an overnight courier guaranteeing next-day delivery, addressed as follows:
To: Optical Communications Products, Inc.
00000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
To: Xxxxxxxx Xxxxxxxxxx
00000 Xxxxxx Xxxxxx, # 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or at such other addresses as either of said parties may from time to time in
writing appoint.
18. This agreement is personal to employee and he may not assign or
delegate any of his rights or obligations hereunder without first obtaining the
written consent of the Company.
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19. With the exception of matters arising under Section 7 of this
Agreement, any controversy between the Company and Employee or between any
employee of the Company and Employee, including, but not limited to, those
involving the construction or application of any of the terms, provisions or
conditions of this agreement or otherwise arising out of or relating to this
Agreement, shall be settled by arbitration in accordance with the then current
commercial arbitration rules of the American Arbitration Association, and
judgment on the award rendered by the arbitrator(s) may be rendered by any court
having jurisdiction thereof. The Company and Employee shall share the cost of
the arbitrator equally but shall each bear their own costs and legal fees
associated with the arbitration. The location of the arbitration shall be in Los
Angeles, California.
20. This Agreement shall inure to the benefits of and be binding
upon the heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized officers or agents.
EMPLOYEE:
/s/ Xxxxxxxx Xxxxxxxxxx
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Xxxxxxxx Xxxxxxxxxx
OPTICAL COMMUNICATION PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Chief Financial Officer and Secretary
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EXHIBIT A
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PROPRIETARY RIGHTS AND CONFIDENTIALITY AGREEMENT
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In return for new or continued employment by Optical Communication
Products, Inc. (hereinafter, the "Company'), Employee acknowledges and agrees as
follows:
1. For the purposes of this Agreement:
a. "Information" shall mean any and all discoveries,
ideas, facts, or any other information relating to the operation of the
Company's business, of whatever type and in whatever form, which is disclosed or
otherwise made available to Employee by the Company in confidence, including,
but not limited to, all information relating to financial, personnel, sales,
customers and scientific matters of the Company, and any other discoveries,
ideas, business plans, or facts relating to any of the foregoing, whether
developed by Employee or by others;
b. "Trade Secret" shall mean any and all Information
that derives independent economic value, actual or potential, from not being
generally known to persons who can obtain economic value from its disclosure or
use, and that is the subject of reasonable efforts by the Company to maintain
its secrecy.
c. "Inventions" shall mean designs, trademarks,
discoveries, formulae, processes, manufacturing techniques, Trade Secrets,
Information, improvements, ideas or copyrightable works.
2. Employee understands that any and all Information and Trade
Secrets are received or developed by him and are disclosed to him in confidence,
and are to be used only for the purpose for which they are provided. During the
term of this employment with the Company or thereafter, Employee shall not,
directly or indirectly, except as required by the normal business of the Company
or expressly consented to in writing by the Board of Directors of the Company:
a. disclose, publish or make available any Information
or Trade Secrets, other than to an employee, officer or director of the Company
who, in the reasonable exercise of Employee's judgment, needs to know such
Information or Trade Secrets in order to perform his duties to the Company;
b. sell, transfer or otherwise use or exploit or
permit the sale, transfer, use or exploitation of the Information or Trade
Secrets for any purpose other than those for which they were provided; or
c. remove from the Company's premises or retain upon
termination any Information or Trade Secrets, any copies thereof or any tangible
or retrievable materials containing or constituting Information or Trade
Secrets.
3. Upon termination of Employee's employment or upon request by
the Company, Employee shall return to the Company all tangible forms of
Information and Trade Secrets.
4. Employee understands that the Company is the sole owner of
any and all property rights in Inventions, including, but not limited to, the
right to use, sell, license or otherwise transfer or exploit the Inventions, and
the right to make such changes in them and the uses thereof as the Company may
from time to time determine. Employee agrees to disclose and assign to the
Company, without further consideration, his entire right, title, and interest
(throughout the United States and in all foreign countries) free and clear of
all liens and encumbrances, in and to all Inventions, which shall be the sole
property of the Company, whether or not patentable. Employee also agrees to
cooperate with the Company both during and after employment in obtaining and
enforcing patents, copyrights, and other protection of the Company's rights in
Inventions. As provided in Section 2870 of the California Labor Code, this
section 4 does not apply to any inventions:
a. for which no equipment, supplies, facility, or Trade
Secrets of the Company were used;
b. which was developed entirely on Employee's own time;
and
c. which does not relate at the time of conception or
reduction to practice to the Company's current business or its actual or
demonstrably anticipated research or development, or which does not result from
any work performed by Employee for the Company.
5. Employee certifies that he has no continuing obligations with
respect to the assignment of Inventions or the worldwide copyrights to
Inventions, nor does Employee claim any previous uncopyrighted Inventions within
the scope of this Agreement as Employee's own, except for the Inventions, if
any, which Employee has listed in Appendix A to this Agreement.
6. Employee certifies that there is no other contract or duty on
Employee's part now in existence to assign Inventions. Employee will not
disclose or induce the Company to use any confidential information or material
that Employee is now or shall become aware of which belongs to anyone other than
the Company.
7. This Agreement does not constitute a contract of employment
and does not in any way restrict Employee's right or the right of the Company to
terminate Employee's employment.
Dated: /s/ Xxxxxxxx Xxxxxxxxxx
_________________________ __________________________________
Employee
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APPENDIX A
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I have made or improved the following Inventions and claim sole right
to them. I include below the names of co-inventors or employers to whom I owe a
continuing obligation with respect to these Inventions.
Dated:_________________________ __________________________________
Employee