EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and between
SRC Vision, Inc., a corporation (the "Company"), and Xxxxxxx X. Xxxxx (the
"Executive"), as of January 1, 1997.
I. RECITAL.
WHEREAS, the Company desires to employ the Executive as Chairman of the
Board.
NOW, THEREFORE, the Company and the Executive desire to set forth in this
Agreement the terms and conditions of the Executive's employment with the
Company.
II. EMPLOYMENT.
The Company hereby employs the Executive and the Executive hereby accepts
such employment, upon the terms and conditions hereinafter set forth, from
January 1, 1997 to and including December 31, 1998. This Agreement shall be
automatically renewed for one additional year unless the Executive or the
Company gives notice to the other, in writing, at least 30 days prior to the
expiration of this Agreement, of its or his desire to terminate this Agreement
or modify its terms. The Company agrees that the Executive will be located, and
will render such services, in the Medford, Oregon area.
III. DUTIES.
A. The Executive shall serve during the course of his employment as
Chairman of the Board of the Company and shall have such other similar duties
and responsibilities as the Board of Directors of the Company shall determine
from time to time.
B. The Executive agrees to devote a portion of his time, energy and ability
to the business of the Company that he deems necessary.
C. For the term of this Agreement, the Executive shall report to the Board
of Directors of the Company.
IV. BASE SALARY.
The Company shall pay the Executive a base salary at the rate of $35,000
per year. Such salary shall be earned monthly and shall be payable in periodic
installments no less frequently than monthly in accordance with the Company's
customary practices. Amounts payable shall be reduced by standard withholding
and other authorized deductions.
V. TERMINATION.
A. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that disability of the Executive has occurred (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the day of
receipt of such notice by the Executive. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his duties with the
Company on the basis provided in this agreement for a period of 3 months as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or his legal representative. "Incapacity" as used
herein shall be limited only to such Disability which substantially prevents
Company from availing itself of the services of the Executive.
B. Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, "Cause" shall mean that the Company, acting in
good faith based upon the information then known to the Company, determines that
the Executive has: (1) committed an act of fraud upon, or an act evidencing
material dishonesty toward the Company; or (2) been convicted of a felony, which
conviction through lapse of time or otherwise is not subject to appeal; or (3)
willfully refused to perform material required duties and responsibilities or
performed them with gross negligence or willful misconduct.
C. Obligations of the Company upon Termination Based upon Death or
Disability or Cause.
1. Death or Disability. If the Executive's employment is terminated by
reason of the Executive's Death or Disability, this Agreement shall
terminate without further obligations to the Executive or his legal
representatives under this Agreement, other than for payment of the sum of
(i) the Executive's annual base salary through the date of termination to
the extent not theretofore paid, and (ii) reasonable employment expenses,
as provided herein, through the date of termination to the extent not
theretofore paid (the sum of the amounts described in clauses (i) and (ii)
shall be hereinafter referred to as the "Accrued Obligations"), which shall
be paid to the Executive or his estate or beneficiary, as applicable, in a
lump sum in cash within 30 days of the date of termination.
2. Cause. If the Executive's employment is terminated by the Company
for Cause, this Agreement shall terminate without further obligations to
the Executive other than for the timely payment of Accrued Obligations.
D. Obligations of the Company upon Termination without Cause. If the
Executive's employment is terminated by the Company other than for cause then
the Company shall pay Executive the Accrued Obligations and, in addition, shall
pay the Executive an amount equal to two years' base salary in equal monthly
installments unless such termination follows a "change of control," in which
case the Company will immediately pay the Executive such amount in cash.
For purposes of this Agreement, a change of control shall mean: (a) any
transfer or series of transfers of capital stock of the Company, other than as a
result of a sale of capital stock of the Company pursuant to a public offering
registered under the Securities Act of 1933, as amended, as a result of which
the holders of capital stock of the Company prior to such transfer or transfers
become, collectively, the legal or beneficial holders of less than fifty percent
(50%) of the capital stock of the Company; (b) the consummation of any merger or
consolidation of the Company with another corporation; provided, however, that
no Change in Control shall be deemed to have occurred if, immediately following
such merger or consolidation, legal or beneficial holders of capital stock of
the Company prior to such merger or consolidation shall own or control, directly
or indirectly, through one or more intermediaries, equity securities
representing the power to vote or direct the voting of more than fifty percent
(50%) of the voting power of all classes of equity securities entitled to vote
in the election of directors of the corporation resulting from such merger or
consolidation; or (c) any transfer of all or substantially all of the business
and assets of the Company to another corporation; provided, however, that no
Change in Control shall be deemed to have occurred if the legal or beneficial
holders of capital stock of the Company prior to such transfer of control,
retain directly or indirectly through one or more intermediaries, the power to
vote or direct the voting of more than fifty percent (50%) of the voting power
of all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the business
and assets of the Company are transferred.
VI. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, shall be submitted
to arbitration, to be held in Medford, Oregon in accordance with the rules and
procedures of the American Arbitration Association. In the event either party
institutes arbitration under this Agreement, the costs and expenses of such
arbitration (including counsel fees) shall be borne by each of the parties, or
as the arbitrator(s) may determine at the request of either party.
VII. CONFIDENTIAL INFORMATION.
The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during his employment by the
Company or any of its affiliated companies and which shall not be or become
public knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's employment
with the company, he shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
VIII. SUCCESSORS.
A. This Agreement is personal to the Executive and shall not, without the
prior written consent of the Company, be assignable by the Executive.
B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall include any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires the stock of the
Company or to which the Company assigns this Agreement by operation of law or
otherwise.
IX. WAIVER.
No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.
X. MODIFICATION.
This Agreement may not be amended or modified other than by a written
agreement executed by the Executive and the Board of Directors of the Company.
XI. SAVINGS CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
XII. COMPLETE AGREEMENT.
This instrument constitutes and contains the entire agreement and
understanding concerning the Executive's employment and the other subject
matters addressed herein between the parties, and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters hereof. This is an integrated document.
XIII. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered within
the State of California, and the rights and obligations of the parties hereunder
shall be construed and enforced in accordance with, and governed by, by the laws
of the State of California without regard to principles of conflict of laws.
XIV. CONSTRUCTION.
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
XV. COMMUNICATIONS.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if mailed
by registered or certified mail, postage prepaid, addressed to the Executive at
____________________________________________________, or addressed to the
Company at 0000 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000. Any party may change the
address at which notice shall be given by written notice given in the above
manner.
XVI. EXECUTION.
This Agreement is being executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.
XVII. LEGAL COUNSEL.
The Executive and the Company recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SRC VISION, INC. XXXXXXX X. XXXXX
By__________________________ __________________________
Its_________________________
