EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment agreement (the "Agreement") is made this 9th day of
June, 1997, by and between Comparator Systems Corporation, a Colorado
corporation (the "Company"), and XXXXXX X. XXXXXXXX (the "Employee").
In consideration of the mutual covenants and agreements herein
contained, and in accordance with the authorization of the Board of
Directors of the Company, the Company and the Employee hereby agree as
follows:
1. SERVICES TO BE RENDERED. The Company hereby retains the
Employee to provide services to the Company, and the Employee hereby
agrees to render such services under the terms of this Agreement. The
Employee shall perform the duties of Chairman of the Board, President and
Chief Executive Officer.
2. TERM OF AGREEMENT. Subject to the provisions for termination
hereinafter provided, the term of this Agreement shall be effective
JUNE 1, 1997, until MAY 30, 2000. The parties hereto agree to enter
into good faith negotiations for the purpose of extending the term of
this Agreement on or about 90 days prior to the expiration of the term
hereof, unless, at such time, the agreement has been or is being
terminated.
3. SERVICES. The Employee shall devote time, attention and
ability to the proper and efficient conduct of his duties hereunder.
Except as set forth in Paragraph 10 below, nothing herein shall be
deemed to prevent the employee from serving any other enterprise in any
capacity, nor shall this Agreement be construed as preventing the
Employee from investing his assets in such form or manner as will
require any services on the part of the Employee in the operation and
the affairs of the companies or entities in which such investments are
made.
4. AUTOMOBILE ALLOWANCE. During the term hereof, the Company
shall provide the Employee with a reasonable automobile allowance in
accordance with the allowance schedule for the position filled by the
Employee.
5. COMPENSATION: EXPENSES.
(a) For the services rendered by the Employee during the
term hereof, the Company shall pay to the Employee a base compensation
at an annual rate of: for the period June 1, 1997 to May 30, 1998
$150,000;
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for the period June 1, 1998 to May 30, 1999 $200,000; for the period
June 1, 1999 to May 30, 2000 $250,000; or at such higher rate as may be
fixed from time to time by the Board of Directors, payable in equal
bi-monthly installments beginning at the end of the first month. The
Employee shall also be entitled to the additional compensation set
forth in Schedule I hereto and to such bonuses as shall be determined
from time to time by the Board of Directors, in its sole discretion.
(b) The Employee shall be authorized to incur reasonable
expenses incident to the maintenance or promotion of the business of
the Company, such as expenses for entertainment, travel, and similar
items, and shall be reimbursed by the Company for such expenses upon
presentation of a statement of such documented expenditures, in
accordance with the Company's current operating procedure.
6. TERMINATION BY THE COMPANY. During the term of this
Agreement, the Company shall have the following right to terminate this
Agreement, subject to Paragraph 7 below:
(a) TERMINATION FOR CAUSE: The Company shall have the right
to terminate this agreement for cause upon 30 days written notice if
the Employee shall have (i) been proven to have caused the Company to
suffer injury as a result of any fraud or willful or wanton misconduct
of Employee during the course of the performance of, or otherwise
related to his or her duties hereunder, or (ii) been convicted of a
felony.
(b) TERMINATION FOR DISABILITY: The Company shall have the
right to terminate this Agreement upon 30 days written notice if the
Employee shall have been unable, as a result of physical illness or
other incapacity, to substantially perform his or her duties hereunder
for a continuous period of six months or longer.
(c) RESIGNATION: Resignation of the Employee shall
terminate this Agreement.
7. TERMINATION BENEFITS. In the event that this Agreement is
terminated by the Company pursuant to Paragraph 6, the Company shall
pay the Employee or his or her estate the following sums, or the
following consequences shall follow, as the case may be:
(a) If this Agreement is terminated by the Company for cause
pursuant to Paragraph 6(a), then (i) the Company's obligation to
compensate the Employee pursuant to Paragraph 5(a) shall cease as of
the date of termination, and (ii) the Company shall not be required to
reimburse the Employee pursuant to Paragraph 5(b) for expenses incurred
after the date of termination.
(b) If this Agreement is terminated by the Company for
disability pursuant to Paragraph 6(b), the Company shall pay the
Employee a disability benefit at an annual rate of 75% of the
Employee's annual base compensation in effect at the time of
termination pursuant to Paragraph 5(a) (excluding additional
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compensation and bonuses), payable in equal monthly installments, such
disability benefit to continue until the earlier to occur of the
expiration of two years after the date of termination or the death of
the Employee.
(c) In the event that the Employee shall die during the term
of this Agreement, the Company agrees to pay to the Employee's widow or
widower, as the case may be, estate, or any other person designated in
writing by the Employee an amount equal to 75% of the Employee's annual
base compensation in effect at the time of death pursuant to paragraph
5(a) (excluding any additional compensation or bonuses). Such payment
shall be made in 6 equal monthly installments.
(d) If this Agreement is terminated by the Company for any
reason other than cause (Paragraph 6(a), or disability (Paragraph 6
(b), or death (Paragraph 6 (d)), the Employee shall be entitled, at his
or her option, to payment of a Sum equal to the aggregate remaining
payments due the Employee pursuant to this Agreement, until expiration
of the term thereof, computed on the basis of the annual base
compensation in effect at the time of termination, determined pursuant
to Paragraph 5(a), (referred to herein as the "Termination Amount"),
payable in a lump sum equal to the discounted present value of the
Termination Amount, using a discount rate equal to the sum of the prime
rate reported in the "Money Rates" column of the Wall Street Journal
(Western Edition) on the date the termination becomes effective,
payable within 30 days after the date on which the termination becomes
effective.
8. VACATION: The Employee shall be entitled to a paid vacation
of four weeks per year, for the first year and thereafter a paid
vacation of six weeks which if unused, may be carried over and accrued
at the election of the Employee. If, upon Employee's termination,
regardless of cause, Employee has accrued vacation which has not been
taken, then Employee shall be paid therefore, at the full compensation
rate then in effect.
9. ADDITIONAL BENEFITS.
(a) The Company agrees to obtain, and to place in effect as
soon a practicable, and to pay for (i) health insurance (including
dental and eye care coverage) for the benefit of the Employee and his
or her immediate dependents, consistent with the coverage provided by
the Company to other employees of the same level, and (ii) term life
insurance, payable to Employee's beneficiary or estate, in an amount
equal to three times the annual compensation as in 5(a).
(b) The Company agrees, subject to Board of Directors
approvals, to provide an annual stock option program for Employee
consistent with that provided to other employees of the same level.
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10. CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE.
(a) The Employee hereby agrees that, during the term of this
Agreement and thereafter, he or she will not disclose to any person, or
otherwise use or exploit any of the proprietary or confidential
information or knowledge, including without limitation, trade secrets,
processes, records of research, proposals, reports, methods, processes,
techniques, computer software or programming, customer lists, or
budgets or other financial information, regarding the Company, its
business, properties or affairs obtained by him or her at any time
prior to or subsequent to the execution of this Agreement, except to
the extent required by his performance of assigned duties for the
Company.
(b) Upon termination of this Agreement, the Employee will
deliver to the Company all tangible displays and repositories of trade
secrets, processes, records of research, proposals, reports, memoranda,
methods, processes, techniques, computer software and programming,
customer lists, or budgets or other financial information, and other
materials or records or writings of any other type (including any
copies thereof) made, used or obtained by the Employee in connection
with this Agreement.
(c) The Employee hereby agrees that during the period from
the date hereof through and including one year after the expiration of
the term hereof, he or she will:
(i) neither authorize his or her name to be used by,
(ii) nor engage in or carry on, directly or indirectly,
for himself, as a member of partnership, as a controlling stockholder,
officer or director of a corporation (other that the Company or any
successor of the Company), or as an employee, agent, associate or
consultant of any person, partnership, corporation (other than the
Company or any successor of the Company) or other business entity, any
business in competition with any business carried on or conducted,
directly or indirectly, by the Company prior to the date hereof or
hereafter, in the Counties of Orange or Los Angeles of the State of
California or any other county where business is then carried on or
conducted by the Company.
(d) The Employee agrees that the remedy at law for any
breach by him of any of the covenants and agreements set forth in this
Paragraph 10 will be inadequate and that in the event of such any such
breach, the Company may, in addition to other remedies which may be
available to it at law, obtain injunctive relief prohibiting him
(together with all those persons associated with him) from the breach
of such covenants and agreements.
(e) The parties hereto intend that the covenants and
agreements contained in this Paragraph 10 shall be deemed to include a
series of separate covenants and agreements. If any judicial
proceeding or court shall refuse to enforce all of the separate
covenants deem included in such action, then such unenforceable
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covenants shall be deemed eliminated from the provisions hereof for the
purposes of such proceeding to the extent necessary to permit the
remaining separate covenants to be enforced in such proceeding.
11. NOTICES. All Notices and other communications permitted or
required hereunder shall be in writing and shall be deemed to have been
duly given when delivered, or two days after having been mailed by
registered or certified mail, postage prepaid, return receipt
requested:
(a) If to Employee, addressed to him or her at: 00 Xxxxxxxxx
Xxxx Xxxxx X-000, Xxxxxx, XX 00000
(b) If to the Company, addressed to it at: 00000 Xxx Xxxxxx
Xxxx., Xxxxxx, XX 00000,
or such other address as either party hereto may designate by written
notice to the other 5 pursuant to this Paragraph.
12. THE ENTIRE AGREEMENT. This agreement constitutes and
embodies the full and complete understanding and agreement of the
parties hereto and supersedes all prior understandings or agreements,
oral or written, whether or not related to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement on the day first written above.
COMPARATOR SYSTEMS CORPORATION
/s/ Xxxx X. Xxxxxxxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxxxxxxx
Its duly authorized
Executive Vice President and
Secretary, Treasurer
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx
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SCHEDULE I
ADDITIONAL COMPENSATION
Employee, by virtue of agreeing to the above employment agreement shall
receive the following shares of stock over the period indicated as a
signing bonus. Said shares to be issued to employee at such time as
the shares are available in the form available, and without cost to the
employee. This signing bonus is to be paid regardless of the
employment status of the employee with the company. This schedule
shall be met as to the time and shares without regard to the current
price of the Company's stock.
During months one 1,000,000 shares
through six per month 6,000,000 shares
During months six 2,000,000 shares
through twelve per month 12,000,000 shares
During months twelve 3,00,000 shares
through eighteen per month 18,000,000 shares
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