EXHIBIT 10.10 Statement re: Employment Contract by and between
the Registrant and Xxxxxx Xxxx
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made effective as of
June 29, 1998, by and between Pacific Research and Engineering Corporation
("PR&E") and Xxxxxx X. Xxxx ("Xxxx").
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. PR&E hereby engages Xxxx, and Xxxx hereby accepts such
engagement, upon the terms and conditions set forth herein.
2. DUTIES.
2.1 POSITION. Xxxx is engaged in the position of President,
reporting to the CEO of PR&E ("CEO") and shall have the
duties and responsibilities mutually agreed on by Xxxx and
CEO. Xxxx shall perform faithfully and diligently such
duties, as well as such other duties as the Board of
Directors of PR&E ("Board") shall reasonably assign from
time to time. Board reserves the right to modify Xxxx'x
position and duties at any time, in its sole and absolute
discretion.
2.2 BEST EFFORTS/FULL-TIME. Xxxx will expend his best efforts
on behalf of PR&E, and will abide by all policies and
decisions made by Board, as well as all applicable federal,
state and local laws, regulations or ordinances. Xxxx will
act in the best interest of PR&E at all times. Xxxx shall
devote Xxxx'x full business time and efforts to the
performance of his assigned duties, unless Xxxx notifies
PR&E in advance of his intent to engage in other paid work
and receives PR&E's express written consent to do so. Xxxx
must not engage in any work that creates an actual or
potential conflict of interest with PR&E and, if Board
believes a conflict exists, Board may ask Xxxx to choose
whether to discontinue the other work or resign employment
with PR&E.
3. COMPENSATION.
3.1 BASE SALARY. As compensation for the proper and
satisfactory performance of all duties to be performed by
Xxxx hereunder, PR&E shall pay to Xxxx a base salary of
$204,360 per year, payable in accordance with the normal
payroll practices of PR&E, less required deductions for
state and federal withholding tax, social security and all
other employment taxes and payroll deductions. In the
event Xxxx'x employment under this Agreement is terminated
by either party, for any reason whatsoever, before the last
day of any employment year, Xxxx will be entitled to
receive for such year only the base salary prorated to the
date of termination.
3.2 INCENTIVE COMPENSATION.
3.2.1 1998 BONUS. Xxxx will be eligible to earn a one-
time $15,000 bonus for calendar year 1998
provided Xxxx is employed by PR&E on
December 31, 1998. Xxxx shall not be entitled to
any other performance bonus or incentive
compensation for 1998.
3.2.2 1999 BONUS. Xxxx will be eligible to earn a
bonus for calendar year 1999 in accordance with
the terms and conditions established by the
Compensation Committee of Board, provided Xxxx
completes and submits to Board a written business
and strategic plan for PR&E within 120 days of
the Start Date specified in paragraph 6.1 below.
3.3 STOCK OPTIONS. Xxxx will receive 75,000 stock options in
accordance with the terms and conditions of PR&E's Stock
Option Plan.
3.4 ASSISTANCE WITH SALE OF HOME. PR&E agrees to pay Xxxx the
real estate agent's commission on the sale of Xxxx'x
Minnesota home, or $57,109.00, payable in thirty-nine equal
bi-weekly installments during the Initial Term of this
Agreement, provided Xxxx remains continuously employed
during such Term. In the event Xxxx'x employment under
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this Agreement is terminated by either party, for any
reason whatsoever, before the last day of the Initial Term,
Xxxx will be entitled to receive only those installment
payments due and owing as of the date of termination.
3.5 PERFORMANCE REVIEW. Board will periodically review Xxxx'x
performance on no less than annual basis. Adjustments to
salary or other compensation, if any, will be made in the
sole and absolute discretion of Board.
4. FRINGE BENEFITS.
4.1 CUSTOMARY FRINGE BENEFITS. Xxxx will be eligible for all
customary and usual fringe benefits generally available to
employees of PR&E. PR&E reserves the right to change or
terminate the fringe benefits on a prospective basis, at
any time, effective upon notice to Xxxx.
4.2 CAR ALLOWANCE. PR&E will pay Xxxx PR&E's standard
executive car allowance of $250 per month.
5. BUSINESS EXPENSES. Xxxx will be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of his
duties on behalf of PR&E. To obtain reimbursement, expenses must
be submitted promptly with appropriate supporting documentation and
must be approved by the Chief Financial Officer of PR&E.
6. TERM.
6.1 INITIAL TERM. The employment relationship pursuant to this
Agreement shall be for an Initial Term commencing on
June 29, 1998 ("Start Date") and continuing until
December 31, 1999 ("Initial Term"), unless sooner
terminated in accordance with paragraph 7.1 or 7.2 below.
6.2 RENEWAL. On completion of the Initial Term specified in
paragraph 6.1 above, PR&E may, at its election, renew this
Agreement for a future unspecified term. It is expressly
understood and agreed that, after the expiration of the
Initial Term, the employment relationship between Xxxx and
PR&E is "at will" and the parties have not agreed to any
further specified terms or to continued employment for so
long as Xxxx performs satisfactorily. After the Initial
Term, the employment relationship may be terminated by
either Xxxx or PR&E at any time, with or without cause,
upon 30 days advance notice.
7. TERMINATION.
7.1 TERMINATION FOR CAUSE BY PR&E. Although PR&E anticipates a
mutually rewarding employment relationship with Xxxx, upon
written notice to Xxxx, PR&E may terminate the employment
relationship immediately in the event of any good cause,
including but not limited to default, dishonesty, neglect
of duties, failure to perform, conviction of a felony or
crime of moral turpitude or death of Xxxx. In the event
Xxxx'x employment is terminated for cause in accordance
with this paragraph during calendar year 1998, Xxxx will
not be entitled to receive the 1998 Bonus, or any part
thereof, as described in paragraph 3.2.1 above.
7.2 VOLUNTARY RESIGNATION WITHOUT CAUSE BY XXXX. Xxxx may
voluntarily resign his position with PR&E with or without
cause at any time on thirty (30) days written notice. In
the event of such resignation during calendar year 1998,
Xxxx will not be entitled to receive the 1998 Bonus, or any
part thereof, as described in paragraph 3.2.1 above.
8. COMPETITIVE EMPLOYMENT. During the term of Xxxx'x employment with
PR&E, and during any period in which Xxxx is receiving payments
from PR&E, Xxxx agrees that he will not directly or indirectly
compete with PR&E in any way, and will not act as an officer,
director, employee, consultant, shareholder, volunteer, lender, or
agent of any business enterprise of the same nature as, or which is
in direct competition with, the business in which PR&E is now
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engaged or in which PR&E becomes engaged during the term of Xxxx'x
employment with PR&E, as may be determined by PR&E in its sole
discretion. Further, Xxxx agrees not to refer any client or
potential client to competitors of PR&E without PR&E's written
consent during the term of Xxxx'x employment with PR&E or during
the period in which Xxxx is receiving payments from PR&E.
9. CONFIDENTIALITY AND PROPRIETARY RIGHTS. As a condition of
employment, Xxxx agrees to read, sign and abide by PR&E's
Confidentiality and Proprietary Rights Agreement attached as
Exhibit A to this Agreement.
10. NO VIOLATION OF RIGHTS OF THIRD PARTIES. Xxxx warrants that the
performance of all the terms of this Agreement and as an employee
of PR&E does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by
Xxxx prior to Xxxx'x employment with PR&E. Xxxx agrees not to
disclose to PR&E, or induce PR&E to use, any confidential or
proprietary information or material belonging to any previous
employer or others. Xxxx warrants that he is not a party to any
other agreement that will interfere with Xxxx'x full compliance
with this Agreement. Xxxx further agrees not to enter into any
agreement, whether written or oral, in conflict with the provisions
of this Agreement.
11. NONSOLICITATION. During the term of this Agreement and for a
period of one year thereafter, irrespective of the manner of
termination of employment, Xxxx agrees not to, directly or
indirectly, separately or in association with others:
11.1 Interfere with, impair, disrupt or damage PR&E's
relationship with any of its clients or prospective clients
by soliciting or encouraging or causing others to solicit
or encourage, any of them for the purpose of diverting or
taking away the business such clients have with PR&E; or
11.2 Interfere with, impair, disrupt or damage PR&E's business
by soliciting, encouraging or causing others to solicit or
encourage any of PR&E's employees to discontinue their
employment with PR&E.
12. GENERAL PROVISIONS.
12.1 SUCCESSORS AND ASSIGNS. The rights and obligations of PR&E
under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of PR&E.
Xxxx shall not be entitled to assign any of Xxxx'x rights
or obligations under this Agreement.
12.2 WAIVER. Either party's failure to enforce any provision of
this Agreement shall not in any way be construed as a
waiver of any such provision, or prevent that party
thereafter from enforcing each and every other provision of
this Agreement.
12.3 SEVERABILITY. In the event any provision of this Agreement
is found to be unenforceable by a court of competent
jurisdiction, such provision shall be deemed modified to
the extent necessary to allow enforceability of the
provision as so limited, it being intended that PR&E shall
received the benefit contemplated herein to the fullest
extent permitted by law. If a deemed modification is not
satisfactory in the judgment of such arbitrator or court,
the unenforceable provision shall be deemed deleted, and
the validity and enforceability of the remaining provisions
shall not be affected thereby.
12.4 INTERPRETATION; CONSTRUCTION. The headings set forth in
this Agreement are for convenience only and shall not be
used in interpreting this Agreement. This Agreement has
been drafted by legal counsel representing PR&E, but Xxxx
has participated in the negotiation of its terms.
Furthermore, Xxxx acknowledges that he has had an
opportunity to review and revise the Agreement and have it
reviewed by legal counsel, if desired, and, therefore, the
normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this
Agreement.
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12.5 GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the United States
and the State of California.
12.6 NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be delivered as
follows with notice deemed given as indicated: (a) by
personal delivery when delivered personally, (b) by
overnight courier upon written verification of receipt,
(c) by telecopy or facsimile transmission upon
acknowledgment of receipt of electronic transmission, or
(d) by certified or registered mail, return receipt
requested, upon verification of receipt. Notice shall be
sent to the addresses set forth below, or such other
address as either party may specify in writing.
12.7 SURVIVAL. This Agreement shall survive Xxxx'x employment
by PR&E.
13. ENTIRE AGREEMENT. This Agreement, including Exhibit A appended
hereto and the PR&E Stock Option Plan referenced herein,
constitutes the entire agreement between the parties relating to
this subject matter and supersedes all prior or simultaneous
representations, discussions, negotiations, and agreements, whether
written or oral. This Agreement may be amended or modified only
with the written consent of Xxxx and the CEO of PR&E. No oral
waiver, amendment or modification will be effective under any
circumstances whatsoever.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
DATED: ___June 19, 1998___ _________/S/ Xxxxxx X. Naab_________
___________6826 Xxxxxxx Lane________
________Eden Prairie, MN 55346______
DATED: ___June 19, 1998___ ________/S/ Xxxx X. Williams________
__________Jack Xxxxxxxx, CEO________
__PACIFIC RESEARCH AND ENGINEERING__
________2070 Las Palmas Drive_______
_________Carlsbad, CA 92121________
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