EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into this ___ day of November, 1996 to be effective as of May 1, 1996 between
LASERMEDICS, INC., a Texas corporation having its principal executive office at
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxx 00000 (hereinafter referred to as
the "Company"), and Xxxxxxx X. Xxxxxxx (hereinafter referred to as the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to enter the Company's employ.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Employee hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
have the meanings prescribed below:
ACCOUNTING FIRM shall have the meaning assigned thereto in Section 11
hereof.
AFFILIATE is used in this Agreement to define a relationship to a
person or entity and means a person or entity who, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, such person or entity.
AGREEMENT PAYMENTS shall have the meaning assigned thereto in Section
11 hereof.
ANNUAL BONUS shall have the meaning assigned thereto in Section
4.2(a) hereof.
BASE SALARY shall have the meaning assigned thereto in Section 4.1
hereof.
BENEFICIAL OWNER shall have the meaning assigned thereto in Rule
13d-3 under the Exchange Act; PROVIDED, HOWEVER, and without limitation, that
any individual, corporation, partnership, group, association or other person or
entity that has the right to acquire any Voting Stock at any time in the future,
whether such right is (a) contingent or absolute or (b) exercisable presently or
at any time in the future, pursuant to any agreement or understanding or upon
the exercise or conversion of rights, options or warrants, or otherwise, shall
be the Beneficial Owner of such Voting Stock.
CAUSE shall have the meaning assigned thereto in Section 5.3 hereof.
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CODE means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated by the Internal Revenue Service thereunder,
all as in effect from time to time during the Employment Period.
COMMON STOCK means the Company's common stock, par value $.01 per
share.
COMPANY means Lasermedics, Inc., a Texas corporation, the principal
executive office of which is located at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx Xxxx,
Xxxxx 00000.
CONFIDENTIAL INFORMATION shall have the meaning assigned thereto in
Section 8.2 hereof.
DATE OF TERMINATION means the earliest to occur of (i) the date of
the Employee's death, (ii) the date on which the Employee terminates this
Agreement for any reason other than Good Reason or (iii) the date of receipt of
the Notice of Termination, or such later date as may be prescribed in the Notice
of Termination in accordance with Section 5.6 hereof.
DISABILITY means an illness or other disability which prevents the
Employee from discharging his responsibilities under this Agreement for a period
of 180 consecutive calendar days, or an aggregate of 180 calendar days in any
calendar year, during the Employment Period, all as determined in good faith by
the Board of Directors of the Company (or a committee thereof).
EFFECTIVE DATE means May 1, 1996.
EMPLOYEE means Xxxxxxx X. Xxxxxxx, an individual whose principal
place of business is at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxx 00000.
EMPLOYMENT PERIOD shall have the meaning assigned thereto in Section
3 hereof.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Securities and Exchange
Commission thereunder, all as in effect from time to time during the Employment
Period.
GOOD REASON shall have the meaning assigned thereto in Section 5.5
hereof.
NOTICE OF TERMINATION shall have the meaning assigned thereto in
Section 5.6 hereof.
OVERPAYMENT shall have the meaning assigned thereto in Section 11
hereof.
PAYMENT shall have the meaning assigned thereto in Section 11 hereof.
PRE-TAX PROFIT shall have the meaning assigned thereto in Section
4.2(b) hereof.
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REDUCED AMOUNT shall have the meaning assigned thereto in Section 11
hereof.
UNDERPAYMENT shall have the meaning assigned thereto in Section 11
hereof.
VACATION PAY shall have the meaning assigned thereto in Section 4.3
hereof.
VACATION TIME shall have the meaning assigned thereto in Section 4.3
hereof.
VOTING STOCK means all outstanding shares of capital stock of the
Company entitled to vote generally in an election of directors; PROVIDED,
HOWEVER, that if the Company has shares of Voting Stock entitled to more or less
than one vote per share, each reference to a proportion of the issued and
outstanding shares of Voting Stock shall be deemed to refer to the proportion of
the aggregate votes entitled to be cast by the issued and outstanding shares of
Voting Stock.
WITHOUT CAUSE shall have the meaning assigned thereto in Section 5.4
hereof.
2. GENERAL DUTIES OF COMPANY AND EMPLOYEE.
2.1 The Company agrees to employ the Employee, and the Employee
agrees to accept employment by the Company and to serve the Company as President
and Chief Executive Officer, and shall also serve as a director of the Company.
The authority, duties and responsibilities of the Employee shall include those
duties of President as specified in the Bylaws of the Company as in effect on
the date hereof, and such other or additional duties as may from time to time be
assigned to the Employee by the Board of Directors. While employed hereunder,
the Employee shall devote his full time and attention during normal business
hours to the affairs of the Company and use his best efforts to perform
faithfully and efficiently his duties and responsibilities. The Employee may (i)
serve on corporate, civic or charitable boards or committees provided that (A)
such boards or committees do not control or advise business entities that
compete with the Company and (B) all such services are promptly disclosed in
writing to the Board of Directors, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Employee's duties and responsibilities.
2.2 The Employee agrees and acknowledges that he owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to do no act and to make no statement, oral or
written, which would injure Company's business, its interests or its reputation.
2.3 The Employee agrees to comply at all times with all applicable
policies, rules and regulations of the Company, including, without limitation,
the Company's Code of Ethics and the Company's policy regarding trading in the
Common Stock, as each is in effect from time to time during the Employment
Period.
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3. TERM. Unless sooner terminated pursuant to other provisions hereof, the
Employee's period of employment under this Agreement shall be the period
beginning on the Effective Date and ending on December 31, 1998. The period of
time beginning on the Effective and ending on December 31, 1998 (notwithstanding
termination of this Agreement prior to the end of such period pursuant to other
provisions hereof) is referred to elsewhere herein as the "Employment Period."
4. COMPENSATION AND BENEFITS.
4.1 BASE SALARY. As compensation for services to the Company, the
Company shall pay to the Employee until the Date of Termination an annual base
salary of $160,000 (the "Base Salary"). The Base Salary shall be payable in
equal semi-monthly installments or in accordance with the Company's established
policy, subject only to such payroll and withholding deductions as may be
required by law and other deductions applied generally to employees of the
Company for insurance and other employee benefit plans.
4.2 ANNUAL BONUS.
(a) In addition to the Base Salary, the Company shall pay to the
Employee, for each calendar year until the Date of Termination, an annual bonus
(the "Annual Bonus") in the amount specified in Section 4.2(b) hereof for each
calendar year in which the Annual Bonus is earned in accordance with Section
4.2(b) hereof.
(b) An Annual Bonus of $40,000 shall be considered earned for
calendar year 1996 if the Pre-Tax Profit (defined below) for calendar year 1996
meets or exceeds $150,000. An Annual Bonus of $80,000 shall be considered earned
for calendar year 1997 if the Pre-Tax Profit for calendar year 1997 meets or
exceeds $300,000. An Annual Bonus of $80,000 shall be considered earned for
calendar year 1998 if the Pre-Tax Profit for calendar year 1998 meets or exceeds
an amount to be established by resolution of the Board of Directors, in its sole
discretion, before January 1, 1998 (if not so established by such date, the
amount shall be $300,000). The term "Pre-Tax Profit" for a given calendar year
means the Company's net income before taxes for that calendar year.
(c) The Annual Bonus shall be payable on or before the 30th day
following the Company's determination of the Pre-Tax Profit for a given calendar
year.
4.3 VACATION. Until the Date of Termination, the Employee shall be
entitled to two weeks paid vacation during each one-year period commencing on
the Effective Date (the "Vacation Time") and each anniversary thereof. All
unused Vacation Time accrued through the Termination Date and not taken or
previously forfeited at the Date of Termination shall be paid to the Employee in
accordance with Article 6 hereof, with such payment being referred to elsewhere
herein as the "Vacation Pay."
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4.4 INCENTIVE, SAVINGS AND RETIREMENT PLANS. Until the Date of
Termination, the Employee shall be eligible to participate in and shall receive
all benefits under all executive incentive, savings and retirement plans
(including 401(k) plans) and programs currently maintained or hereinafter
established by the Company for the benefit of its executive officers and/or
employees.
4.5 WELFARE BENEFIT PLAN. Until the Date of Termination, the Employee
and/or the Employee's family, as the case may be, shall be eligible to
participate in and shall receive at the Company's expense all benefits under
each welfare benefit plan of the Company currently maintained or hereinafter
established by the Company for the benefit of its employees. Such welfare
benefit plans may include, without limitation, medical, dental, disability,
group life, accidental death and travel accident insurance plans and programs.
4.6 REIMBURSEMENT OF EXPENSES. The Employee may from time to time
until the Date of Termination incur various business expenses customarily
incurred by persons holding positions of like responsibility, including, without
limitation, travel, entertainment and similar expenses incurred for the benefit
of the Company. Subject to the Company's policy regarding the reimbursement of
such expenses as in effect from time to time during the Employment Period, which
does not necessarily allow reimbursement of all such expenses, the Company shall
reimburse the Employee for such expenses from time to time, at the Employee's
request, and the Employee shall account to the Company for all such expenses.
4.7 STOCK OPTIONS. The Board of Directors, in its sole discretion,
may grant to the Employee options to acquire shares of Common Stock at an
exercise price equal to the Fair Market Value (as defined in the Company's 1996
Incentive Stock Plan) of the Common Stock on the effective date of such grant.
All such options will be granted under the Company's 1996 Incentive Stock Plan
using the Company's standard form of stock option agreement and will be under
such terms and conditions as determined by the Board of Directors in its sole
discretion consistent therewith. To the extent permitted under the Code, such
options will be Incentive Stock Options (as defined in the Company's 1996
Incentive Stock Plan).
5. TERMINATION.
5.1 DEATH. This Agreement shall terminate automatically upon the
death of the Employee.
5.2 DISABILITY. The Company may terminate this Agreement, upon
written notice to the Employee delivered in accordance with Sections 5.6 and
13.1 hereof, upon the Disability of the Employee.
5.3 CAUSE. The Company may terminate this Agreement, upon written
notice to the Employee delivered in accordance with Sections 5.6 and 13.1
hereof, for Cause. For purposes of this Agreement, "Cause" means (i) the
conviction of the Employee of a felony (which, through lapse of time or
otherwise, is not subject to appeal), (ii) the Employee's refusal, without
proper legal cause, to perform his duties and responsibilities as contemplated
in this Agreement or
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otherwise follow the direction of the Board of Directors or (iii) the Employee's
engaging in activities which would (A) constitute a breach of any term of this
Agreement, the Company's Code of Ethics, the Company's policies regarding
trading in the Common Stock or reimbursement of business expenses or any other
applicable policies, rules or regulations of the Company, or (B) result in a
material injury to the business, condition (financial or otherwise), results of
operations or prospects of the Company or its Affiliates (as determined in good
faith by the Board of Directors of the Company).
5.4 WITHOUT CAUSE. The Company may terminate this Agreement Without
Cause, upon written notice to the Employee delivered in accordance with Sections
5.6 and 13.1 hereof. For purposes of this Agreement, the Employee will be deemed
to have been terminated "Without Cause" if the Employee is terminated by the
Company for any reason other than Cause, Disability of the Employee or death of
the Employee.
5.5 GOOD REASON. The Employee may terminate this Agreement for Good
Reason, upon written notice to the Company delivered in accordance with Sections
5.6 and 13.1 hereof. For purposes of this Agreement, "Good Reason" means (i) the
assignment to the Employee of any duties inconsistent in any material respect
with the Employee's duties or responsibilities as contemplated in this
Agreement, (ii) any other action by the Company which results in a material
diminishment in the Employee's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities, (iii) any
material breach by the Company of any of the provisions of this Agreement, (iv)
requiring the Employee to relocate permanently to any office or location other
than Houston, Texas, and its surrounding metropolitan area without his consent,
or (v) any reduction, or attempted reduction, at any time during the Employment
Period, of the Base Salary.
5.6 NOTICE OF TERMINATION. Any termination of this Agreement by the
Company for Cause, Without Cause or as a result of the Disability of the
Employee, or by the Employee for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Employee's employment under the
provision so indicated and (iii) specifies the termination date, if such date is
other than the date of receipt of such notice (which termination date shall not
be more than 15 days after the giving of such notice).
6. OBLIGATIONS OF COMPANY UPON TERMINATION.
6.1 CAUSE; OTHER THAN GOOD REASON; DISABILITY. If this Agreement
shall be terminated (i) by the Company for Cause or Disability of the Employee
or (iii) by the Employee for any reason other than Good Reason:
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(a) the Company shall pay to the Employee or his estate, in
a lump sum in cash within 30 days after the Date of Termination, the
aggregate of the following amounts:
(1) the Vacation Pay, if any, owed to the
Employee;
(2) if not theretofore paid, the Base Salary
through the Date of Termination; and
(3) in the case of compensation previously
deferred by the Employee, all amounts of such compensation
previously deferred and not yet paid by the Company; and
(b) the Company shall, promptly upon submission by the
Employee of supporting documentation, pay or reimburse to the
Employee any costs and expenses paid or incurred by the Employee
prior to the Date of Termination which would have been payable under
Section 4.6 hereof if the Employee's employment had not terminated.
.
6.2 DEATH. Subject to the provisions of this Section 6.2, if this
Agreement is terminated as a result of the Employee's death, the Company shall
pay to the Employee's estate, in a lump sum in cash within 30 days of the Date
of Termination, that portion of the Base Salary owing in respect of the balance
of the Employment Period. The Company may purchase insurance to cover all or any
part of the obligation contemplated in the foregoing sentence, and the Employee
agrees to submit to a physical examination to facilitate the procurement of such
insurance. If the physical examination reveals that the Employee is uninsurable,
such death benefit referred to in this Section 6.2 shall not be provided, and
the Employee's estate shall be entitled to receive only those death benefits to
which it is entitled under the Company's benefit plans.
6.3 GOOD REASON; WITHOUT CAUSE. If this Agreement shall be terminated
either by the Employee for Good Reason or by the Company Without Cause:
(a) the Company shall pay to the Employee, in a lump sum in
cash within 30 days after the Date of Termination, the aggregate of
the following amounts:
(1) the Vacation Pay, if any, owed to the
Employee;
(2) if not theretofore paid, the Base Salary
through the Date of Termination; and
(3) in the case of compensation previously
deferred by the Employee, all amounts of such compensation
previously deferred and not yet paid by the Company;
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(b) the Company shall, promptly upon submission by the
Employee of supporting documentation, pay or reimburse to the
Employee any costs and expenses paid or incurred by the Employee
prior to the Date of Termination which would have been payable under
Section 4.6 hereof if the Employee's employment had not terminated;
(c) for the remainder of the Employment Period, the Company
shall continue benefits to the Employee and/or the Employee's family
at least equal to those which would have been provided to them under
Section 4.5 hereof if the Employee's employment had not been
terminated; and
(d) the Company shall pay to the Employee, in equal
semi-monthly installments, the Base Salary for the remainder of the
Employment Period.
7. EMPLOYEE'S OBLIGATION TO AVOID CONFLICTS OF INTEREST.
7.1 Consistent with the Employee's fiduciary duties to the Company,
the Employee agrees that he shall not knowingly become involved in a conflict of
interest with the Company, or upon discovery thereof, allow such a conflict to
continue. The Employee further agrees to disclose to the Company, promptly after
discovery, any facts or circumstances which might involve a conflict of interest
with the Company.
7.2 The Company and the Employee recognize that it is impossible to
provide an exhaustive list of actions or interests which constitute a "conflict
of interest." Moreover, the Company and the Employee recognize that there are
many borderline situations. In some instances, full disclosure of facts by the
Employee to the Company is all that is necessary to enable the Company to
protect its interests. In others, if no improper motivation appears to exist and
the Company's interests have not suffered, prompt elimination of the outside
interest will suffice. In still others, it may be necessary for the Company to
terminate the employment relationship. The Company and the Employee agree that
the Company's determination as to whether or not a conflict of interest exists
shall be conclusive. The Company reserves the right to take such action as, in
its judgment, will end the conflict of interest.
7.3 In this connection, it is agreed that any direct or indirect
interest in, connection with or benefit from any outside activities,
particularly commercial activities, which interest might in any way adversely
affect the Company or its Affiliates, involves a possible conflict of interest.
Circumstances in which a conflict of interest on the part of the Employee would
or might arise, and which should be reported immediately to the Company,
include, but are not limited to, the following:
(a) Ownership of a material interest in any lender,
supplier, contractor, subcontractor, customer or other entity with
which the Company does business.
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(b) Acting in any capacity, including director, officer,
partner, consultant, employee, distributor, agent or the like, for
any lender, supplier, contractor, subcontractor, customer or other
entity with which the Company does business.
(c) Acceptance, directly or indirectly, of payments,
services or loans from a lender, supplier, contractor, subcontractor,
customer or other entity with which the Company does business,
including, without limitation, gifts, trips, entertainment or other
favors of more than a nominal value, but excluding loans from
publicly held insurance companies and commercial or savings banks at
market rates of interest.
(d) Use of information or facilities to which the Employee
has access in a manner which will be detrimental to the Company's
interests, such as use for the Employee's own benefit of know-how or
information developed through the Company's business activities.
(e) Disclosure or other misuse of information of any kind
obtained through the Employee's connection with the Company.
(f) Acquiring or trading in, directly or indirectly, other
properties or interests connected with the design or marketing of
products or services designed or marketed by the Company.
8. EMPLOYEE'S CONFIDENTIALITY OBLIGATION.
8.1 The Employee hereby acknowledges, understands and agrees that all
Confidential Information is the exclusive and confidential property of the
Company and its Affiliates which shall at all times be regarded, treated and
protected as such in accordance with this Section 8. The Employee acknowledges
that all such Confidential Information is in the nature of a trade secret.
8.2 For purposes of this Agreement, "Confidential Information" means
information which is used in the business of the Company or its Affiliates and
(i) is proprietary to, about or created by the Company or its Affiliates, (ii)
gives the Company or its Affiliates some competitive business advantage or the
opportunity of obtaining such advantage or the disclosure of which could be
detrimental to the interests of the Company or its Affiliates, (iii) is
designated as Confidential Information by the Company or its Affiliates, is
known by the Employee to be considered confidential by the Company or its
Affiliates, or from all the relevant circumstances should reasonably be assumed
by the Employee to be confidential and proprietary to the Company or its
Affiliates, or (iv) is not generally known by non-Company personnel. Such
Confidential Information includes, without limitation, the following types of
information and other information of a similar nature (whether or not reduced to
writing or designated as confidential):
(a) Internal personnel and financial information of the
Company or its Affiliates, vendor information (including vendor
characteristics, services, prices, lists and agreements), purchasing
and internal cost information, internal service and operational
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manuals, and the manner and methods of conducting the business of the
Company or its Affiliates;
(b) Marketing and development plans, price and cost data,
price and fee amounts, pricing and billing policies, quoting
procedures, marketing techniques, forecasts and forecast assumptions
and volumes, and future plans and potential strategies (including,
without limitation, all information relating to any acquisition
prospect and the identity of any key contact within the organization
of any acquisition prospect) of the Company or its Affiliates which
have been or are being discussed;
(c) Names of customers and their representatives, contracts
(including their contents and parties), customer services, and the
type, quantity, specifications and content of products and services
purchased, leased, licensed or received by customers of the Company
or its Affiliates; and
(d) Confidential and proprietary information provided to
the Company or its Affiliates by any actual or potential customer,
government agency or other third party (including businesses,
consultants and other entities and individuals).
8.3 As a consequence of the Employee's acquisition or anticipated
acquisition of Confidential Information, the Employee shall occupy a position of
trust and confidence with respect to the affairs and business of the Company and
its Affiliates. In view of the foregoing and of the consideration to be provided
to the Employee, the Employee agrees that it is reasonable and necessary that
the Employee make each of the following covenants:
(a) Until the Date of Termination and at all times
thereafter, the Employee shall not disclose Confidential Information
to any person or entity, either inside or outside of the Company,
other than as necessary in carrying out his duties and
responsibilities as set forth in Section 2 hereof, without first
obtaining the Company's prior written consent (unless such disclosure
is compelled pursuant to court orders or subpoena, and at which time
the Employee shall give notice of such proceedings to the Company).
(b) Until the Date of Termination and at all times
thereafter, the Employee shall not use, copy or transfer Confidential
Information other than as necessary in carrying out his duties and
responsibilities as set forth in Section 2 hereof, without first
obtaining the Company's prior written consent.
(c) On the Date of Termination, the Employee shall promptly
deliver to the Company (or its designee) all written materials,
records and documents made by the Employee or which came into his
possession on or before the Date of Termination (even if prior to the
date hereof) concerning the business or affairs of the Company or its
Affiliates, including, without limitation, all materials containing
Confidential Information.
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9. DISCLOSURE OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES
AND INVENTIONS.
As part of the Employee's fiduciary duties to the Company, the
Employee agrees that during his employment by the Company and for a period of
three years following the Date of Termination, the Employee shall promptly
disclose in writing to the Company all information, ideas, concepts,
improvements, discoveries and inventions, whether patentable or not, and whether
or not reduced to practice, which are conceived, developed, made or acquired by
the Employee, either individually or jointly with others, and which relate to
the business, products or services of the Company or its Affiliates,
irrespective of whether the Employee used the Company's time or facilities and
irrespective of whether such information, idea, concept, improvement, discovery
or invention was conceived, developed, discovered or acquired by the Employee on
the job, at home, or elsewhere. This obligation extends to all types of
information, ideas and concepts, including information, ideas and concepts
relating to new types of services, corporate opportunities, acquisition
prospects, the identity of key representatives within acquisition prospect
organizations, prospective names or service marks for the Company's business
activities, and the like.
10. OWNERSHIP OF INFORMATION, IDEAS, CONCEPTS, IMPROVEMENTS, DISCOVERIES
AND INVENTIONS, AND ALL ORIGINAL WORKS OF AUTHORSHIP.
10.1 All information, ideas, concepts, improvements, discoveries and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by the Employee or which are disclosed or made known to the Employee,
individually or in conjunction with others, during the Employee's employment by
the Company and which relate to the business, products or services of the
Company or its Affiliates (including, without limitation, all such information
relating to corporate opportunities, research, financial and sales data, pricing
and trading terms, evaluations, opinions, interpretations, acquisition
prospects, the identity of customers or their requirements, the identity of key
contacts within the customers' organizations or within the organization of
acquisition prospects, marketing and merchandising techniques, and prospective
names and service marks) are and shall be the sole and exclusive property of the
Company. Furthermore, all drawings, memoranda, notes, records, files,
correspondence, manuals, models, specifications, computer programs, maps and all
other writings or materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries and inventions are and shall be the
sole and exclusive property of the Company.
10.2 In particular, the Employee hereby specifically sells, assigns,
transfers and conveys to the Company all of his worldwide right, title and
interest in and to all such information, ideas, concepts, improvements,
discoveries or inventions, and any United States or foreign applications for
patents, inventor's certificates or other industrial rights which may be filed
in respect thereof, including divisions, continuations, continuations-in-part,
reissues and/or extensions thereof, and applications for registration of such
names and service marks. The Employee shall assist the Company and its nominee
at all times, until the Date of Termination and at all times thereafter, in the
protection of such information, ideas, concepts, improvements, discoveries or
inventions,
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both in the United States and all foreign countries, which assistance shall
include, but shall not be limited to, the execution of all lawful oaths and all
assignment documents requested by the Company or its nominee in connection with
the preparation, prosecution, issuance or enforcement of any applications for
United States or foreign letters patent, including divisions, continuations,
continuations-in-part, reissues and/or extensions thereof, and any application
for the registration of such names and service marks.
10.3 In the event the Employee creates, during the Employee's
employment by the Company, any original work of authorship fixed in any tangible
medium of expression which is the subject matter of copyright (such as,
videotapes, written presentations on acquisitions, computer programs, drawings,
maps, architectural renditions, models, manuals, brochures or the like) relating
to the Company's business, products or services, whether such work is created
solely by the Employee or jointly with others, the Company shall be deemed the
author of such work if the work is prepared by the Employee within the scope of
his employment; or, if the work is not prepared by the Employee within the scope
of his employment but is specially ordered by the Company as a contribution to a
collective work, as a part of a motion picture or other audiovisual work, as a
translation, as a supplementary work, as a compilation or as an instructional
text, then the work shall be considered to be a work made for hire, and the
Company shall be the author of such work. If such work is neither prepared by
the Employee within the scope of his employment nor a work specially ordered and
deemed to be a work made for hire, then the Employee hereby agrees to sell,
transfer, assign and convey, and by these presents, does sell, transfer, assign
and convey, to the Company all of the Employee's worldwide right, title and
interest in and to such work and all rights of copyright therein. The Employee
agrees to assist the Company and its Affiliates, at all times, until the Date of
Termination and at all times thereafter, in the protection of the Company's
worldwide right, title and interest in and to such work and all rights of
copyright therein, which assistance shall include, but shall not be limited to,
the execution of all documents requested by the Company or its nominee and the
execution of all lawful oaths and applications for registration of copyright in
the United States and foreign countries.
11. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise) (a "Payment") would be nondeductible by the
Company for federal income tax purposes because of Section 280G of the Code,
then the aggregate present value of amounts payable or distributable to or for
the benefit of the Employee pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be nondeductible by the Company because of Section 280G of the Code.
Anything in this Agreement to the contrary notwithstanding, if the Reduced
Amount is zero and it is determined further that any Payment which is not an
Agreement Payment would nevertheless be nondeductible by the Company for federal
income tax purposes because of Section 280G of the
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Code, then the aggregate present value of Payments, which are not Agreement
Payments, shall also be reduced (but not below zero) to an amount expressed in
present value which maximizes the aggregate present value of Payments without
causing any Payment to be nondeductible by the Company because of Section 280G
of the Code. For purposes of this Section 11, present value shall be determined
in accordance with Section 280G(d)(4) of the Code. All determinations required
to be made under this Section 11 shall be made by the Company's independent
certified public accountant (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Employee within 15 business
days of the Date of Termination. Any such determination by the Accounting Firm
shall be binding upon the Company and the Employee. The Employee shall determine
which and how much of the Agreement Payments (or, at the election of the
Employee, other Payments) shall be eliminated or reduced consistent with the
requirements of this Section 11; provided, that if the Employee does not make
such determination within ten business days of the receipt of the calculations
made by the Accounting Firm, the Company shall elect which and how much of the
Agreement Payments shall be elimi nated or reduced consistent with the
requirements of this Section 11 and shall notify the Employee promptly of such
election. Within five business days thereafter, the Company shall pay to or
distribute for the benefit of the Employee such amounts as are then due to the
Employee under this Agreement and shall promptly pay to or distribute for the
benefit of the Employee in the future such amounts as become due to the Employee
under this Agreement. As a result of the uncertainty in the application of
Section 280G of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Agreement Payments will have been
made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. In the event that the Accounting Firm determines
that an Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to the Employee which the Employee shall repay to the
Company, together with interest at the applicable federal rate provided for in
Section 7872(E)(2) of the Code; provided, however, that no amount shall be
payable by the Employee to the Company if and to the extent such payment would
not reduce the amount which is subject to taxation under Section 4999 of the
Code. In the event that the Accounting Firm determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company to or for
the benefit of the Employee, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code.
12. EMPLOYEE'S NON-COMPETITION OBLIGATION.
12.1 (a) Until the Date of Termination, the Employee shall not,
acting alone or in conjunction with others, directly or indirectly, in any of
the business territories in which the Company or any of its Affiliates is
presently or from time to time conducting business, invest or engage, directly
or indirectly, in any business which is competitive with that of the Company or
accept employment with or render services to such a competitor as a director,
officer, agent, employee or consultant, or take any action inconsistent with the
fiduciary relationship of an employee to his employer; provided, however, that
the beneficial ownership by the Employee of
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up to three percent of the Voting Stock of any corporation subject to the
periodic reporting requirements of the Exchange Act shall not violate this
Section 12.1(a).
(b) In addition to the other obligations agreed to by the
Employee in this Agreement, the Employee agrees that until the Date of
Termination, he shall not at any time, directly or indirectly, (i) induce,
entice or solicit any employee of the Company to leave his employment, (ii)
contact, communicate or solicit any customer or acquisition prospect of the
Company derived from any customer list, customer lead, mail, printed matter or
other information secured from the Company or its present or past employees or
(iii) in any other manner use any customer lists or customer leads, mail,
telephone numbers, printed material or other information of the Company relating
thereto.
12.2 (a) If this Agreement is terminated by the Employee for any
reason or by the Company for Cause or Disability of the Employee, then for a
period of two years following the Date of Termination, the Employee shall not,
acting alone or in conjunction with others, directly or indirectly, in any of
the business territories in which the Company or any of its Affiliates is
presently or at the Date of Termination conducting business, invest or engage,
directly or indirectly, in any business which is competitive with that of the
Company as of the Date of Termination or accept employment with or render
services to such a competitor as a director, officer, agent, employee or
consultant, or take any action inconsistent with the fiduciary relationship of
an employee to his employer; provided, however, that the beneficial ownership by
the Employee of up to three percent of the Voting Stock of any corporation
subject to the periodic reporting requirements of the Exchange Act shall not
violate this Section 12.2(a).
(b) In addition to the other obligations agreed to by the
Employee in this Agreement, the Employee agrees that if this Agreement is
terminated by the Employee for any reason or by the Company for Cause or
Disability of the Employee, then for a period of two years following the Date of
Termination, The Employee shall not at any time, directly or indirectly, (i)
induce, entice or solicit any employee of the Company to leave his employment,
(ii) contact, communicate or solicit any customer or acquisition prospect of the
Company derived from any customer list, customer lead, mail, printed matter or
other information secured from the Company or its present or past employees or
(iii) in any other manner use any customer lists or customer leads, mail,
telephone numbers, printed material or other information of the Company relating
thereto.
12.3 If this Agreement is terminated by the Company Without Cause,
then the Employee shall not be subject to any non-competition obligations
hereunder.
12.4 The parties hereto acknowledge and agree that (i) the agreements
and covenants set forth in this Section 12 are being made for good and valuable
consideration, the receipt and sufficiency of which is acknowledged; (ii) the
covenants contained in this Section 12 are an important aspect of this
Agreement, and the Company would not have entered into this Agreement absent the
inclusion of this Section 12; and (iii) the restrictions imposed in this Section
12, including
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the geographic area and duration of the covenants made herein, are reasonable
and necessary to protect the Company. If the Employee breaches or indicates an
intention to breach any term or provision of this Section 12, the parties hereto
agree that the Company shall be entitled to the right of both temporary and
permanent injunctive relief and/or specific performance. The right of the
Company to such relief shall not be construed to prevent the Company from
pursuing, either consecutively or concurrently, any and all other legal or
equitable remedies available to it for such breach or threatened breach,
specifically including, without limitation, the recovery of monetary damages. If
any court determines that any provision of this Section 12, or any part thereof,
is unenforceable because of the duration or geographic scope of such provision,
the parties hereto agree that such court shall have the power to reduce the
duration or geographic scope of such provision, as the case may be, and the
parties hereto agree to request the court to exercise such power, and, in its
amended form, such provision shall then be enforceable and shall be enforced.
13. MISCELLANEOUS.
13.1 NOTICES. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when delivered by hand or
mailed by registered or certified mail, return receipt requested, as follows
(provided that notice of change of address shall be deemed given only when
received):
If to the Company to:
Lasermedics, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxxx 00000
If to the Employee to:
Xxxxxxx X. Xxxxxxx
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxxx 00000
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section 13.1.
13.2 WAIVER OF BREACH. The waiver by any party hereto of a breach of
any provision of this Agreement shall neither operate nor be construed as a
waiver of any subsequent breach by any party.
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13.3 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors, legal representatives and assigns,
and upon the Employee, his heirs, executors, administrators, representatives and
assigns; provided, however, the Employee agrees that his rights and obligations
hereunder are personal to him and may not be assigned without the express
written consent of the Company.
13.4 ENTIRE AGREEMENT; NO ORAL AMENDMENTS. This Agreement, together
with any exhibit attached hereto and any document, policy, rule or regulation
referred to herein, replaces and merges all previous agreements and discussions
relating to the same or similar subject matter between the Employee and the
Company and constitutes the entire agreement between the Employee and the
Company with respect to the subject matter of this Agreement. This Agreement may
not be modified in any respect by any verbal statement, representation or
agreement made by any employee, officer, or representative of the Company or by
any written agreement unless signed by an officer of the Company who is
expressly authorized by the Company to execute such document.
13.5 ENFORCEABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
13.6 JURISDICTION; ARBITRATION. The laws of the State of Texas shall
govern the interpretation, validity and effect of this Agreement without regard
to the place of execution or the place for performance thereof. Any controversy
or claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration located in Houston, Texas administered by the
American Arbitration Association in accordance with its applicable arbitration
rules, and the judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof, which judgment shall be
binding upon the parties hereto.
13.7 INJUNCTIVE RELIEF. The Company and the Employee agree that a
breach of any term of this Agreement by the Employee would cause irreparable
damage to the Company and that, in the event of such breach, the Company shall
have, in addition to any and all remedies of law, the right to any injunction,
specific performance and other equitable relief to prevent or to redress the
violation of the Employee's duties or responsibilities hereunder.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first written above.
LASERMEDICS, INC.
By: /S/ XXXXX XXXXXXXXXX
Xxxxx Xxxxxxxxxx
Vice President and Secretary
EMPLOYEE:
/S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
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