EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of December 31, 2000 (the "Effective Date"), by and between
LIQUIDMETAL TECHNOLOGIES, a California corporation (the "Company"), and T. Xxxxx
Xxxxxxx (the "Employee").
RECITALS
WHEREAS, the Employee desires to be employed by the Company upon the terms
and conditions set forth in this Agreement; and
WHEREAS, the Company desires to assure itself of the Employee's continued
employment in the capacities set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
good and valuable consideration, the parties hereto covenant and agree as
follows:
1. EMPLOYMENT. The Company hereby employs Employee, and the Employee hereby
accepts such employment, upon the terms and conditions set forth in this
Agreement.
2. TERM. Subject to the terms and conditions of this Agreement, including,
but not limited to, the provisions for termination set forth in Section 5
hereof, the employment of the Employee under this Agreement shall commence on
the Effective Date and shall continue through the close of business on the third
(3rd) anniversary of the Effective Date (the "Initial Term"). Upon the
expiration of the Initial Term, the term of employment shall automatically and
continuously renew on a year-to-year basis (each such year being referred to as
a "Renewal Term") unless and until the term of employment is terminated pursuant
to Section 5 hereof.
3. DUTIES. The Employee will initially serve as the Executive Vice
President of the Company. The Employee will use the Employee's best efforts to
promote the success of the Company's business and will cooperate fully with the
Board of Directors in the advancement of the best interests of the Company.
Furthermore, the Employee shall assume and competently perform such reasonable
responsibilities and duties as may be assigned to the Employee from time to time
by the President of the Company. To the extent that the Company shall have any
parent company, subsidiaries, affiliated corporations, partnerships, or joint
ventures (collectively "Related Entities"), the Employee shall perform such
duties to promote these entities and their respective interests to the same
extent as the interests of the Company without additional compensation. The
Company acknowledges and agrees that the Employee is involved with business
enterprises and business interests other than the Company and that the Employee
will continue to be involved with, and will continue to devote time and
attention to, other business enterprises and interests during the term of his
employment with the Company. Nothing set forth in this Agreement shall be
construed as prohibiting the Employee from engaging in or being involved with
such other businesses and interests during Employee's employment by the Company.
4. COMPENSATION.
(a) Annual Base Salary. As compensation for Employee's services and in
consideration for the Employee's covenants contained in this Agreement, the
Company shall pay the Employee an annual base salary of One Hundred Seventy Five
Thousand and No/100 Dollars ($175,000.00). Such annual base salary shall be
payable in equal installments in accordance with the policy then prevailing for
the Company's salaried employees generally, and the annual base salary shall be
subject to any tax and other withholdings or deductions required by applicable
laws and regulations. The Employee's annual base salary will be reviewed by the
Board of Directors of the Company not less frequently than annually, and the
annual base salary may be adjusted upward, although it may not be adjusted
downward at any time. For purposes of this Agreement, the term "Salary Year"
means the 365-day period that begins on the Effective Date and each successive
365-day period thereafter.
(b) Bonuses. In addition to the Employee's annual base salary, during the
term of the Employee's employment hereunder, the Employee shall be entitled to
only such bonuses as may be granted to the Employee by the Board of Directors of
the Company, in its sole discretion.
(c) Other Benefits. During the term of the Employee's employment hereunder,
the Employee shall be eligible to participate in such pension, life insurance,
health insurance, disability insurance and other benefits plans, if any, which
the Company may from time to time make available to similar-level employees.
(d) Vacation. The Employee shall be entitled to four (4) weeks paid
vacation during each Salary Year during the term of the Employee's employment
hereunder. Unused vacation from a particular Salary Year will not carry over to
succeeding Salary Years, and the Employee will not be paid for any unused
vacation.
(e) Reimbursement of Expenses. The Employee shall be reimbursed for all
reasonable and customary travel and other business expenses incurred by Employee
in the performance of Employee's duties hereunder, provided that such
reimbursement shall be subject to, and in accordance with, any expense
reimbursement policies and/or expense documentation requirements of the Company
that may be in effect from time to time.
(f) Option Grant. In addition to the foregoing, in consideration of the
execution of this Agreement by the Employee, the Company shall, on the date
hereof, grant to the Employee an option to purchase up to 50,000 shares of the
common stock of the Company at an exercise price of $15.00 per share. Such
option shall be evidenced by a stock option agreement in the form set forth as
Exhibit A hereto.
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5. TERMINATION.
(a) Death. The Employee's employment under this Agreement shall terminate
immediately upon Employee's death. In the event of a termination pursuant to
this Section 5(a), the Employee's estate shall be entitled to receive any unpaid
base salary owing to Employee up through and including the date of the
Employee's death.
(b) Disability. If, during the term of the Employee's employment hereunder,
the Employee becomes physically or mentally disabled in accordance with the
terms and conditions of any disability policy covering the Employee or, if due
to any physical or mental condition, the Employee becomes unable for a period of
more than sixty (60) days during any six-month period to perform Employee's
duties hereunder on substantially a full-time basis as determined by the Company
in its sole discretion, the Company may, at its option, terminate the Employee's
employment upon not less than thirty (30) days written notice. In the event of a
termination pursuant to this Section 5(b), the Employee shall be entitled to
receive any unpaid base salary owing to Employee up through and including the
effective date of Termination.
(c) Termination By Company Without Cause. In addition to the other
termination provisions of this Agreement, the Company may terminate the
Employee's employment at any time without cause (a "Termination Without Cause").
(d) Termination By Company With Cause. The Company may terminate the
Employee's employment at any time with Cause. As used in this Agreement, "Cause"
shall include the following: (1) the Employee's failure or inability to
materially perform Employee's duties under this Agreement; (2) intentional
dishonesty, misconduct, or unlawful acts that materially and adversely affect
the Company; (3) a material and intentional violation of the Company's policies
or practices which reasonably justifies immediate termination; (4) pleading
guilty or no contest to, or conviction of, a felony involving moral turpitude,
fraud, dishonesty, or intentional misrepresentation; (5) the commission by the
Employee of any intentional act which could reasonably be expected to materially
injure the reputation, business, or business relationships of the Company or
Related Entities; (6) the Employee's inability to materially perform an
essential function of Employee's position; or (7) any material breach by
Employee of this Agreement. The Company may terminate this Agreement for Cause,
as defined in clauses (1), (3), (5), (6) and (7) above, upon thirty days prior
written notice (the "Cause Notification Period") to Employee, but such
termination shall only become effective in the event of Employee's failure to
cure the applicable breach or violation, to the reasonable satisfaction of
Company, prior to the end of the Cause Notification Period. The Company may
terminate this Agreement for Cause, as defined in clauses (2) and (4) above, at
any time with no notice. In the event of a termination for Cause, the Company
shall be relieved of all its obligations to the Employee provided for by this
Agreement as of the effective date of termination, except that Employee shall be
entitled to the annual base salary and all benefits that have accrued hereunder
up to and including the effective date of termination.
(e) Termination by the Employee for Good Reason. The Employee may terminate
this Agreement at any time for Good Reason. For purposes of this Agreement,
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"Good Reason" means the occurrence of a Change in Control of the Company. For
this purpose, a "Change in Control" shall be deemed to have occurred upon the
happening of any one of the following events:
(i) any person, entity, or group thereof acting in concert (a "Person")
(other than (A) the Employee, (B) the Company or any of its
subsidiaries, (C) a trustee or other fiduciary holding securities
under any employee benefit plan of the Company or any of its
subsidiaries, (D) an underwriter temporarily holding securities
pursuant to an offering of such securities or (E) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock in the
Company) being or becoming the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company which, together with securities previously
owned, confer upon such Person the combined voting power, on any
matters brought to a vote of shareholders, of fifteen percent (15%) or
more of the then outstanding shares of voting securities of the
Company; or
(ii) the sale, assignment or transfer of assets of the Company or any
subsidiary or subsidiaries, in a transaction or series of
transactions, if the aggregate consideration received or to be
received by the Company or any such subsidiary in connection with such
sale, assignment or transfer is greater than fifty percent (50%) of
the book value, determined by the Company in accordance with generally
accepted accounting principles, of the Company's assets determined on
a consolidated basis immediately before such transaction or the first
of such transactions; or
(iii)the merger, consolidation, share exchange or reorganization of the
Company (or one or more direct or indirect subsidiaries of the
Company) as a result of which the holders of all of the shares of
capital stock of the Company as a group would receive fifty percent
(50%) or less of the combined voting power of the voting securities of
the Company or such surviving or resulting entity or any parent
thereof immediately after such merger, consolidation, share exchange
or reorganization; or
(iv) the adoption of a plan of complete liquidation or the approval of the
dissolution of the Company; or
(v) the commencement (within the meaning of Rule 13e-4 under the
Securities Exchange Act of 1934) of a tender or exchange offer which,
if successful, would result in a Change of Control of the Company; or
(vi) a determination by the Board of Directors of the Company, in view of
the then current circumstances or impending events, that a Change of
Control of the Company has occurred or is imminent, which
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determination shall be made for the specific purpose of triggering the
operative provisions of this Agreement.
(f) Severance Payment. In the event that the Company terminates the
Employee's employment hereunder other than specifically pursuant to Section 5(a)
or Section 5(d) above, or in the event that the Employee terminates his own
employment for Good Reason, the Employee shall receive, as severance
compensation, a lump-sum cash payment equal to one (1) times the annual base
salary that is in effect on the effective date of termination (the "Severance
Payment"). The Severance Payment shall be due and payable to the Employee within
five (5) calendar days of the effective date of the termination, and if the
Severance Payment is not timely paid, the Severance Payment will, upon the
expiration of such five-day period, begin accruing interest daily at a rate
equal to ten percent (10%) per annum. Additionally, if the Severance Payment is
not timely made, all obligations of the Employee pursuant to Section 6 of this
Agreement will automatically and immediately terminate and be of no further
force and effect as of the expiration of such five-day period.
6. NONCOMPETITION, NONSOLICITATION, AND NONDISCLOSURE COVENANTS.
(a) Rationale for Restrictions. Employee acknowledges that Employee's
services hereunder are of a special, unique, and extraordinary character, and
Employee's position with the Company places Employee in a position of confidence
and trust with customers, suppliers, and other persons and entities with whom
the Company and its Related Entities have a business relationship. The Employee
further acknowledges that the rendering of services under this Agreement will
likely require the disclosure to Employee of Confidential Information (as
defined below) relating to the Company and/or Related Entities. As a
consequence, the Employee agrees that it is reasonable and necessary for the
protection of the goodwill and legitimate business interests of the Company and
Related Entities that the Employee make the covenants contained in this Section
6, that such covenants are a material inducement for the Company to employ the
Employee and to enter into this Agreement, and that the covenants are given as
an integral part of and incident to this Agreement.
(b) Noncompetition and Nonsolicitation Covenants. As used herein, the term
"Restrictive Period" means the time period commencing on the Effective Date of
this Agreement and ending on the first (1st) anniversary of the date on which
the Employee's employment by the Company (or any Related Entity) expires or is
terminated. The Employee agrees that, during the Restrictive Period, the
Employee will not utilize his or her knowledge of the business of the Company or
his or her relationships with investors, suppliers, customers, clients, or
financial institutions to compete with the Company or any of the Related
Entities in any business which is the same as, or substantially similar to, any
business conducted by the Company or any of the Related Entities at any time
during the Restrictive Period (a "Covered Business"). Additionally, the Employee
agrees that the Employee will not engage in any of the following acts anywhere
in the world during the Restrictive Period:
(i) directly or indirectly engage or invest in; own, manage, operate,
finance, control, or participate in the ownership, management,
operation, financing, or control of; be employed by, associated with,
or in any
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manner connected with; lend the Employee's name or any similar name
to; lend Employee's credit to; or render services or advice to, any
business which competes with a Covered Business;
(ii) intentionally and knowingly assist, promote or encourage any existing
or potential employees, customers, clients, or vendors of the Company
or any Related Entity to terminate, discontinue, or materially reduce
the extent of their relationship with the Company or a Related Entity;
and/or
(iii)directly or indirectly solicit business of the same or similar type
as a Covered Business, from any person or entity known by the Employee
to be a customer or client of the Company, whether or not the Employee
had contact with such person or entity during the Employee's
employment with the Company.
The Employee acknowledges and agrees that, in light of the unique nature of the
Company's business, the Company will market its products on a worldwide basis
and will compete with various companies and businesses across and world.
Accordingly, the Employee agrees that the geographic scope of the above
covenants is a reasonable means of protecting the Company's (and the Related
Entities') legitimate business interests. Notwithstanding the foregoing
covenants, nothing set forth in this Agreement shall prohibit the Employee from
owning the securities of (i) corporations which are listed on a national
securities exchange or traded in the national over-the-counter market in an
amount which shall not exceed 5% of the outstanding shares of any such
corporation or (ii) any corporation, partnership, firm or other form of business
organization which does not compete with, is not engaged in, and does not carry
on any aspect of, either directly or indirectly through a subsidiary or
otherwise, any Covered Business. Furthermore, nothing set forth in this
Agreement shall prohibit the Employee from working for, consulting with,
investing in, or otherwise assisting a competitor of the Company if the Employee
works for, consults with, invests in, or otherwise assists a division,
subsidiary, or subpart of the competitor that is unrelated to a Covered
Business.
(c) Disclosure of Confidential Information. The Employee acknowledges that
the inventions, innovations, software, trade secrets, business plans, financial
strategies, finances, and all other confidential or proprietary information with
respect to the business and operations of the Company and Related Entities are
valuable, special, and unique assets of the Company. Accordingly, the Employee
agrees not to, at any time whatsoever either during or after the Employee's term
of employment with the Company, disclose, directly or indirectly, to any person
or entity, or use or authorize any person or entity to use, any confidential or
proprietary information with respect to the Company or Related Entities without
the prior written consent of the Company, including, without limitation,
information as to the financial condition, results of operations, identities of
clients or prospective clients, products under development, acquisition
strategies or acquisitions under consideration, pricing or cost information,
marketing strategies or any other information relating to the Company or any of
the Related Entities which could be reasonably regarded as confidential
(collectively referred to as "Confidential Information"). However, the term
"Confidential Information" does not include (i) any information which is or does
become generally available to the public other than
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as a result of disclosure by the Employee or any agent or representative of the
Employee, (ii) any information that is independently developed by the Employee
or any agent, representative, or affiliate of the Employee, and (iii) any
information that is disclosed to the Employee on a non-confidential basis if
such information is disclosed to the Employee subsequent to the termination of
his employment with the Company and if the Employee has no reason to believe
that such information is being wrongly disclosed. In addition to the foregoing,
Company will be fully entitled to all of the protections and benefits afforded
by the Florida Uniform Trade Secrets Act and other applicable law.
(d) Legal Proceedings. Notwithstanding the provisions of Section 6(c)
above, the Employee shall be permitted to disclose Confidential Information if
the Employee is legally compelled to make such disclosure or, alternatively, if
such disclosure is necessary for the defense of any legal action brought against
the Employee by the Company or any other party, provided that the Employee must
provide the Company with reasonably prompt notice of such legal proceeding so
that the Company may seek an appropriate protective order or other appropriate
relief, or waive compliance with the provisions of this Agreement.
(e) Removal and Return of Proprietary Items. Upon termination of Employee's
employment with the Company by either party (regardless of the reason for
termination), or upon the request of the Company during the term of employment,
the Employee will return to the Company all of the documents and other items
containing Confidential Information in the Employee's possession or subject to
the Employee's control.
(f) Enforcement and Remedies. In the event of any breach of any of the
covenants set forth in this Section 6, the Employee recognizes that the remedies
at law will be inadequate and that in addition to any relief at law which may be
available to the Company for such violation or breach and regardless of any
other provision contained in this Agreement, the Company shall be entitled to
equitable remedies (including an injunction) and such other relief as a court
may grant after considering the intent of this Section 6. Additionally, the
period of time applicable to any covenant set forth in this Section 6 will be
extended by the duration of any violation by Employee of such covenant. In the
event a court of competent jurisdiction determines that any of the covenants set
forth in this Section 6 are excessively broad as to duration, geographic scope,
prohibited activities or otherwise, the parties agree that this covenant shall
be reduced or curtailed to the extent, but only to the extent, necessary to
render it enforceable.
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7. EMPLOYEE INVENTIONS.
(a) Definition. For purposes of this Agreement, "Employee Invention" means
any idea, invention, technique, modification, process, or improvement (whether
patentable or not), any industrial design (whether registerable or not), any
mask work, however fixed or encoded, that is suitable to be fixed, embedded or
programmed in a semiconductor product (whether recordable or not), and any work
of authorship (whether or not copyright protection may be obtained for it)
created, conceived, or developed by the Employee, either solely or in
conjunction with others, during the Employee's employment with the Company or
during the six (6) month period following such employment, that relates in any
way to, or is useful in any manner in, the businesses then being conducted or
proposed to be conducted by the Company or any Related Entity.
(b) Ownership of Employee Inventions. Employee agrees and acknowledges that
all Employee Inventions will belong exclusively to the Company and that all
Employee Inventions are works made for hire and the property of the Company,
including any copyrights, patents, semiconductor mask protection, or other
intellectual property rights pertaining thereto. If it is determined that any
such works are not works made for hire, the Employee hereby assigns to the
Company all of the Company's right, title, and interest, including all rights of
copyright, patent, semiconductor mask protection, and other intellectual
property rights, to or in such Employee Inventions. The Employee covenants that
the Employee will promptly:
(i) disclose to the Company in writing any Employee Invention;
(ii) assign to the Company or to a party designated by the Company, at the
Company's request and without additional compensation, all of the
Employee's right to the Employee Invention for the United States and
all foreign jurisdictions;
(iii)execute and deliver to the Company such applications, assignments,
and other documents as the Company may request in order to apply for
and obtain patents or other registrations with respect to any Employee
Invention in the United States and any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above obligations;
and
(v) give testimony and render any other assistance in support of the
Company's rights to any Employee Invention.
8. ESSENTIAL AND INDEPENDENT COVENANTS. The Employee's covenants in Sections 6
and 7 of this Agreement are independent covenants, and the existence of any
claim by the Employee against the Company under this Agreement or otherwise will
not excuse the Employee's breach of any covenant in Section 6 or 7.
9. REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE. The Employee represents and
warrants to the Company that the execution and delivery by the Employee of this
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Agreement do not, and the performance by the Employee of the Employee's
obligations hereunder will not, with or without the giving of notice or the
passage of time, or both: (a) violate any judgment, writ, injunction, or order
of any court, arbitrator, or governmental agency applicable to the Employee, or
(b) conflict with, result in the breach of any provisions of or the termination
of, or constitute a default under, any agreement to which the Employee is a
party or by which the Employee is or may be bound, including, without
limitation, any noncompetition agreement or similar agreement.
10. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when hand-delivered, sent by facsimile transmission (as
long as receipt is acknowledged), or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed to the
address or facsimile number for each party set forth on the signature page
hereto, or to such other address or facsimile number as either party may have
furnished to the other in writing in accordance herewith, except that a notice
of change of address shall be effective only upon receipt.
11. MISCELLANEOUS. No provision of this Agreement may be modified or waived
unless such waiver or modification is agreed to in writing signed by both of the
parties hereto. No waiver by any party hereto of any breach by any other party
hereto shall be deemed a waiver of any similar or dissimilar term or condition
at the same or at any prior or subsequent time. This Agreement is the entire
agreement between the parties hereto with respect to the Employee's employment
by the Company, and there are no agreements or representations, oral or
otherwise, expressed or implied, with respect to or related to the employment of
the Employee which are not set forth in this Agreement. This Agreement shall be
binding upon, and inure to the benefit of, the Company, its respective
successors and assigns, and the Employee and Employee's heirs, executors,
administrators and legal representatives. The duties and covenants of the
Employee under this Agreement, being personal, may not be delegated or assigned
by the Employee without the prior written consent of the Company, and any
attempted delegation or assignment without such prior written consent shall be
null and void and without legal effect. The parties agree that if any provision
of this Agreement shall under any circumstances be deemed invalid or
inoperative, the Agreement shall be construed with the invalid or inoperative
provision deleted and the rights and obligations of the parties shall be
construed and enforced accordingly.
12. GOVERNING LAW; RESOLUTION OF DISPUTES. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the State of Florida without regard to principles of choice of law or conflicts
of law thereunder. Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against
either of the parties in the courts of the State of Florida, County of
Hillsborough, or, if it has or can acquire jurisdiction, in the United States
District Court located in Hillsborough County, Florida, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on either party anywhere in the world.
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THE PARTIES HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION ARISING UNDER OR
RELATING TO THIS AGREEMENT.
13. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be 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. This Agreement may
be effective upon the execution and delivery by any party hereto of facsimile
copies of signature pages hereto duly executed by such party; provided, however,
that any party delivering a facsimile signature page covenants and agrees to
deliver promptly after the date hereof two (2) original copies to the other
party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
LIQUIDMETAL TECHNOLOGIES
By: /s/ Xxxx Xxxx
---------------------------------------
Name: Xxxx Xxxx
Title: President and CEO
Liquidmetal Technologies
00000 Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Facsimile Number: [___________________]
EMPLOYEE
By: /s/ T. Xxxxx Xxxxxxx
---------------------------------------
Printed Name: T. Xxxxx Xxxxxxx
----------------------------
Address and Facsimile Number:
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