EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the first (1st) day of January, 1999, between
EYEMAKERS, INC., a Nevada corporation (the "Corporation") and XXXX X. XXXXXXX
(the "Executive").
WHEREAS, the Executive has valuable experience, knowledge and ability in
the Corporation's field of business; and
WHEREAS, the Corporation wishes to retain the employment of the Executive
as its Chief Executive Officer under the terms of this Agreement and the
Executive is willing to accept such employment upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants, warranties and mutual
agreements herein set forth and in reliance upon the representations and
warranties contained herein, the parties do hereby agree as follows:
SECTION I. Term of Employment and Employment Duties.
A. Employment Period. The Executive agrees to be employed by the
Corporation on the terms and conditions herein contained, for a period
(hereinafter called the "Term") commencing on the date hereof and continuing for
two (2) years (the "Initial Term") and thereafter from year to year, unless
terminated by either party's giving written notice to the other at least sixty
(60) days prior to the termination of the Initial Term or sixty (60) days prior
to a subsequent anniversary thereof. During the Term, the Executive shall
devote a substantial majority of his time, energy and skill to the affairs of
the Corporation and any subsidiaries and affiliated business entities and to the
promotion of their interests.
B. Duties. The Executive shall serve as the President and Chief Executive
Officer of the Corporation, with responsibility for leading and guiding the
Corporation, providing strategic direction and generally responsible for
establishing and successfully managing the performance of the Corporation's
business plan, as well as such services and duties for the Corporation, or of
any corporation affiliated with the Corporation, consistent with such position
as he may be reasonably assigned from time to time by the Board of Directors of
the Corporation. The Executive shall also serve as a member of the
Corporation's Board of Directors during the Term by election of the Executive
to the Corporation's Board of Directors. The Executive agrees to travel for
business purposes for reasonable lengths of time.
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SECTION II. Compensation.
A. Compensation. During the Term of this Agreement, as compensation for
his services and covenants under this Agreement, the Corporation shall pay the
Executive a minimum salary at the rate of One Hundred Seventy Five Thousand
($175,000) Dollars per annum, payable either (i) in equal semi-monthly
installments on the 15th and last day of each calendar month during the Term of
this Agreement; or (ii) in accordance with the Corporation's regular payroll
practices for its principal executives, pro-rated for any partial employment.
Such minimum salary shall be reviewed annually by the Board of Directors for
possible increase based upon Executive's performance. The Corporation shall
pay Executive additional compensation by such other means as are set forth
herein.
B. Bonus. In addition to the compensation set forth above, Executive may
earn a bonus, payable in cash, equal to up to 100% of his base salary if the
performance of the Corporation meets or exceeds the criteria set forth on
Exhibit A hereto.
C. Stock Options. On the date of employment hereof the Corporation grants
to Executive incentive stock options at an exercise price of fair market value
in an amount equal to one million (1,000,000) shares. Such options shall vest
over four years, have a ten year life and are otherwise subject to the terms of
the Company's IRS-compatible Performance Incentive Stock Plan, or other plans
adopted by the Corporation. During the term, or any renewal, hereof if the
Corporation issues additional stock or securities convertible into stock, the
Corporation shall grant to Executive additional options to maintain his
aggregate optioned shares at not less than 3% of the actual shares outstanding.
From time to time the Board of Directors may decide , in its sole discretion, to
grant Executive additional stock options.
D. Stock Acquisition. In the event that the Corporation performs at 150%
of Board-approved budgeted sales and budgeted operating income for any four (4)
successive quarters during the term, or any renewal), hereof, Corporation agrees
to lend to the Executive the sum of Four Hundred Thousand ($400,000) Dollars and
if the Executive executes the loan he will purchase from the Corporation at fair
market value Four Hundred Thousand ($400,000) Dollars worth of shares of common
or preferred stock of the Corporation. The Executive's obligation to repay the
aforesaid loan will be represented by his personal note (the "Note") which is
secured by a pledge of his stock (the "Pledge Agreement"), copies of which are
attached hereto as Exhibits B and C.
1. Interest on said loan shall begin upon the borrowing date and shall
accrue at the applicable federal rate for seven (7) year term notes effective
upon the borrowing date and shall be payable annually. Executive shall apply
all bonuses earned to the payment of interest, but if bonuses are not declared,
then the Executive shall make payment from his other funds; provided, however,
that the Executive may, at his option, elect to have any unpaid interest accrued
and added to the principal at the end of each year, marked by the anniversary
date hereof.
2. Principal on said Note shall be paid in full at the end of the seven
(7) year Term of the Note; provided, however, that principal shall be pre-paid
in whole or in part,
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from any and all bonuses earned by and payable to the Executive during the Term
hereof to the extent said bonuses exceed accrued and current interest due, as
well as any and all proceeds received by Executive from dividends or on a sale
of his stock of the Corporation, or otherwise pursuant to the terms of the Note
and Pledge Agreement executed by Executive.
3. At the option of Executive, he may turn back shares of stock owned by
him (common or preferred) to the Corporation, at their then fair market value,
as payment of his obligations, both principal and interest, on said Note.
4. In the event Executive's employment with the Corporation should
terminate prior to the satisfaction of the Note, the Note, and all principal and
interest due thereunder, shall become immediately due and payable on said
termination date. Executive shall have the option to satisfy the Note by a cash
payment or by turning back stock at its then fair market value.
E. Reimbursement of Expenses. During the Term of this Agreement, the
Executive will be reimbursed by the Corporation for his reasonable business
expenses incurred in connection with the performance of his duties hereunder, to
the extent that such expenditures are substantiated by the Executive to meet the
requirements of the Internal Revenue Service regulations and are deductible by
the Corporation for federal income tax purposes.
SECTION III. Health and Insurance Plans and Vacation.
During the Term of this Agreement, the Executive shall be entitled to
participate in any medical or accidental death insurance plan which has been or
which may be adopted by the Corporation for the general and overall benefit of
full-time principal executives of the Corporation, upon the same terms and
conditions as such executives. The Executive shall enjoy such vacation, holiday
and similar rights and privileges as are enjoyed generally by the Corporation's
full-time principal executives.
SECTION IV. Non-Competition and Confidentiality.
A. Non-Competition During and After Employment Period. The Executive
agrees that both during his employment by the Corporation and for a period of
twenty-four (24) months following the termination of such employment for any
reason other than the Corporation's breach of this Agreement, he shall not
engage, directly or indirectly, in any location where the products of the
Corporation are being marketed at the time of his termination (or within a
period of twelve (12) months prior thereto), in any business of the same nature
as or of a similar nature to the business of the Corporation; nor shall the
Executive engage in or participate, directly or indirectly, in the ownership or
management of any enterprises so engaged, except that nothing contained in-this
Section shall prevent the Executive from owning any stock listed on a national
securities exchange or traded in
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the over-the-counter market in any business of the same nature as or of a
similar nature to the business of the Corporation so long as the Executive and
his "associates" (as such term is defined in Regulation 14A of the Securities
Exchange Act of 1934 as in effect on the date hereof) collectively do not own
more than five (5%) percent of such stock, unless the Corporation is one of
Executive's "associates".
B. Hiring of Affiliated Employees. The Executive agrees that during his
employment and for a period of twenty-four (24) months thereafter (provided that
the Corporation shall not have breached its obligations hereunder) neither he
nor any employer with whom he is at the time affiliated, shall hire, offer to
hire, entice away or in any other manner persuade or attempt to persuade any
officer, employee or agent of the Corporation to discontinue his or her
relationship with the Corporation. For purposes of the preceding sentence, an
employer with whom the Executive is "affiliated" shall be considered one which
the Executive in combination with members of his family and with not more than
three other unrelated persons and members of their respective families have the
power, directly or indirectly, to control by reason of stock ownership,
directorship, executive ownership or otherwise.
C. Confidentiality. The Executive agrees that during the Employment Period
and at all times thereafter he shall hold and keep confidential all data and
information relating to the business of the Corporation or of any corporation or
other entity which is now or which may, during the Term of this Agreement,
become affiliated with the Corporation ("Confidential Information" as defined
below) as to which the Executive is now, or at any time during his employment
under this Agreement shall become informed. The Executive agrees that he shall
not, directly or indirectly, either disclose any Confidential Information to any
person, firm or corporation, or use the same or permit the same to be disclosed
or used, except in connection with the business and affairs of the Corporation
or any affiliate of the Corporation.
D. Definition of Confidential Information. "Confidential Information"
shall include, but not be limited to, the following types of information, both
existing and contemplated, and regarding either the corporation, its affiliates
or any company from whom the Corporation has acquired its assets: corporate
agreements; information, including contractual arrangements, plans, strategies,
tactics, policies, resolutions, patent applications and any litigation or
negotiations; marketing information, including sales strategies, tactics,
methods, customers, prospects or market research data; financial information,
including cost and performance data, debt arrangement, equity structure,
investors and holdings; operational information, including control and
inspection practices, manufacturing processes and methods, suppliers and parts;
technical information, including machinery designs, product designs, drawings
and specifications; technology, including patents, processes and any other
information used to manufacture the Corporation's products or provide the
services which Corporation provides; and personnel information, including
personnel lists, resumes, personal data, organizational structure and
performance evaluations. Confidential Information is limited to that
information which is not generally known or hereafter becomes known through no
breach
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by Executive of this Agreement to the public and does not include general
skills, knowledge and experience acquired by the Executive before and/or during
his employment with the Corporation.
E. Employment By Others. Provided that the Executive devotes the
substantial majority of his time, energy and skill to the Corporation during the
term hereof he is not prohibited from engagement by others as a director,
(subject to a maximum of four), provided that any such engagement shall not be
in the fields of refractive laser surgery or optometric practice management.
SECTION V. Inventions and Discoveries. The Executive agrees:
A. That he will promptly disclose to the Corporation all inventions,
discoveries and improvements whether patentable or not, made or conceived during
the Term hereof, which are within or in any way related to the existing or
contemplated scope (now or at any later time during such Term), of the business
of the Corporation. An invention, discovery or improvement shall be deemed to
have been made within such Term if it is made or conceived within twelve (12)
months after the end of such Term and results from or was suggested by the
Executive's employment by the Corporation.
B. That he will upon request assign to the Corporation or to any other
party designated by the Corporation, any or all of said inventions, discoveries
or improvements, any patent applications filed thereon, together with all
extensions, reissues and renewals thereof in this and in all foreign countries;
that he will promptly execute all proper papers for these purposes and for use
in applying for, obtaining and maintaining all such patents as the Corporation
may request, all at the expense of the Corporation, in the event any of such
inventions, discoveries or improvements are not included within the scope of the
Patent Agreement. The Executive's obligation to execute the papers and
assignments specified in this paragraph shall continue at all times beyond the
period of his employment and shall bind his heirs, assigns, executors,
administrators and other legal representatives.
SECTION VI. Termination of Employment.
A. The Executive's employment as provided in Section I hereto may be
terminated by the Corporation at any time, but only (a) upon any breach by the
Executive of this Agreement under Sections IV and V hereof; or (b) upon repeated
willful neglect by the Executive of any duty or responsibility created pursuant
to Section I.B. hereof, which breach or neglect shall not have been cured within
thirty (30) days after written notice to the Executive; (c) after the Executive
shall have been unable because of "Disability", as hereinafter defined, to
perform his duties for a cumulative period of twelve (12) months within any
eighteen (18) month period; or (d) upon his death. Before termination for
disability as provided herein, all the terms of this Agreement shall remain in
effect, including, without limitation, salary and fringe benefit provisions.
The term "Disability" means any physical or mental condition of the Executive
which shall substantially
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incapacitate him from performing his principal duties hereunder. If any
controversy shall arise as to the existence of a Disability condition, the
Executive shall be examined by a physician who shall have performed the most
recent physical examination of Executive, or if none, by such physician who
shall have performed a recent physical examination of any executive officer of
the Corporation, and the decision of such physician shall be conclusive and
binding on both parties.
B. Termination by the Corporation by any other means shall obligate the
Corporation to pay to Executive the Severance payments set forth in Section VII
below. Executive may terminate the contract within sixty (60) days after
written notice to the Company, without any payment of the severance benefits set
forth in Section VII below.
SECTION VII. Severance. In the event that Executive's employment
hereunder is terminated by the Corporation for any other reason other than the
Corporation's rights under Section VI or the occurrence of a Change of Control,
then Executive shall receive a severance payment equal to twelve (12) months of
salary at his then current rate of salary. In the event of the occurrence of a
Change of Control Executive shall receive a severance payment equal to three (3)
times Executive's annual salary during the last year of Executive's employment
with the Corporation. The severance payments provided herein shall be payable
in one lump sum within 30 days of the occurrence of a Change of Control, payable
at the option of the Corporation either in cash or in common stock of the
Corporation or the stock of the corporate acquirer of a 51% majority of the
common stock of the Corporation, valued at the bid side of the market for such
stock, and shall include demand registration rights within one year of such
severance payment. For purposes of this Section, the term Change of Control
shall mean a change in the ownership of the Outstanding Common Stock, (defined
as including then outstanding common stock together with the underlying common
stock of all outstanding convertible indebtedness or convertible preferred
securities, but not unexercised warrants or options) such that 50% or more of
the Outstanding Common Stock is owned by other than shareholders who own
outstanding stock on the date hereof.
VIII. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed by first-class, registered mail, return receipt
requested, postage and registry fees pre-paid and addressed as follows:
A. If to the Executive:
Xxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
B. If to Corporation:
Eyemakers, Inc.
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0000 XxXxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Corporate Secretary
Addresses may be changed by notice in writing signed by the addressee:
SECTION IX. Submission to Jurisdiction. The Executive hereby expressly
submits to the jurisdiction of all federal and state courts located in the state
of Nevada, and consents that any process or notice of motion or other
application to any of said courts or a judge thereof may be served upon the
Executive within or without such courts' jurisdiction by registered mail or by
personal service, provided a reasonable time for appearance is allowed.
SECTION X. Miscellaneous.
A. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the state of Nevada.
B. This Agreement embodies the entire agreement and understanding between
the Corporation and the Executive.
C. This Agreement may not be modified or amended or any term or provision
thereof waived or discharged except in writing signed by the Party against whom
such amendment, modification, waiver or discharge is sought to be enforced.
D. All of the terms of this Agreement, whether so expressed or not, shall
be binding upon the respective personal representatives, successors and assigns
of the parties hereto and shall inure to the benefit of and be enforceable by
the parties hereto and their respective personal representatives, successors and
assigns; provided, however, that this Agreement may not be assigned by either
party hereto without the prior written consent of the other, except that
Corporation may assign its rights under this Agreement.
E. All schedules and Exhibits hereto are made a part of this Agreement as
though set forth in full herein.
F. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
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XXXX X. XXXXXXX EYEMAKERS, INC.
[signed] [signed]
_______________________________ By:________________________________
Title:
ATTEST:
Witness: Witness:
[signed] [signed]
_______________________________ __________________________________
EXHIBIT A - BONUS CRITERIA
TO EARN %
SHOWN OF
BASE SALARY PERFORMANCE OF THE CORPORATION TO BOARD-APPROVED BUDGETS
----------- --------------------------------------------------------
100% 100% of budgeted revenue and 70% of budgeted operating income
90% 90% of budgeted revenue and 60% of budgeted operating income
80% 80% of budgeted revenue and 50% of budgeted operating income
At the discretion Below 80% of budgeted revenue and 50% of budgeted operating
of the Board of income
Directors.
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