EXHIBIT 10.18
XXXXX X. XXXXXXXX
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of October 26, 2000 between AVT Corporation, a Washington corporation ("AVT or
"Employer") and Xxxxx X. Xxxxxxxx ("Executive").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, Employer and Executive hereby agree as follows:
1. Employment
Effective as of November 27, 2000 or such earlier date as Executive may
designate (the "Commencement Date"), Employer hereby employs Executive, and
Executive hereby accepts employment by Employer, as President and Chief
Executive Officer of Employer. Executive will also be entitled to serve as a
member of the Board of Directors of Employer during the term of his employment.
In this position Executive will be reporting directly to the Board of Directors
of AVT and will be responsible for managing all aspects of AVT, including sales,
marketing, product development, customer support, manufacturing, finance and
administration. Executive will have the policy and decision-making authority and
responsibility, and will perform the duties customarily performed by an
executive officer of a corporation that is, in all respects, similar to
Employer. In addition, Executive will assist the Board of Directors in various
business development and long range planning activities and such other duties as
may be reasonably assigned from time to time by Employer's Board of Directors
that relate to the business of Employer, its subsidiaries, or any business
ventures in which Employer or its subsidiaries may participate.
2. Attention and Effort
Executive will devote his entire working time, ability, attention and
effort to Employer's business and will skillfully serve its interests during
reasonable business hours during the term of this Agreement; provided, however,
that Executive may devote reasonable periods of time to (a) engaging in personal
investment activities and (b) engaging in charitable or community service
activities, so long as neither of the foregoing additional activities materially
interferes with Executive's duties under this Agreement. Employer further
understands that between the Commencement Date and February 25, 2001, a portion
of Executive's time will be devoted to fulfilling his obligations under a
transition plan with his current employer, including acting as an independent
consultant therefor. Additionally, Executive may serve on the Board of Directors
of his current employer as long as such service is not otherwise prohibited by
Section 8 hereof.
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3. Term
Unless otherwise terminated pursuant to Section 6, the initial term of
this Agreement shall expire on December 31, 2004. Thereafter, this Agreement
shall automatically renew for additional one-year periods unless terminated
pursuant to Section 6 or unless either party gives the other ninety (90) days
prior written notice of its intent not to renew.
4. Compensation
During the term of this Agreement, Employer agrees to pay or cause to be
paid to Executive, and Executive agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
4.1 Annual Base Salary
Executive's compensation shall consist, in part, of an annual base salary
initially established at $300,000, before all customary payroll deductions, for
the term of this Agreement. Such annual base salary shall be paid in
substantially equal installments and at the same intervals as other employees of
Employer are paid. Employer's Board of Directors shall determine any future
increases in the amount of such annual base salary, but may not reduce the
annual base salary.
4.2 Bonus
Executive will be entitled to receive, in addition to the annual base
salary described above, with respect to each calendar year during the term of
his employment with Employer commencing with 2001, two types of annual bonuses,
as follows: (A) an annual bonus targeted at an amount aggregating 25% of
Executive's base salary for each year for achievement of specified objectives
for each such year as determined by mutual agreement of Employer and Executive
and set forth in writing within the first 60 days of each calendar year of
employment (the "Objective Bonus"), the aggregate amount of the Objective Bonus
for each year to be allocated pursuant to such agreement among such objectives;
and (B) an annual bonus of up to 25% of Executive's base salary for each year
under AVT's Management Incentive Compensation Plan, and payable in full or in
part as provided in such plan if AVT achieves specified financial performance
levels as set forth in such plan (the "MIP Bonus"). In recognition that
Executive is joining AVT late in the fiscal year, in lieu of this bonus
structure for fiscal 2000, Executive will be paid a $75,000 sign-on bonus on the
Commencement Date. Employer's Board of Directors shall determine the composition
of future bonus programs and any future increases in the amount of such bonus
targets; provided however, that the total annual bonus target Executive will
have an opportunity to receive will be at least $150,000.
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4.3 Stock Options
Upon the Commencement Date, Executive will be granted nonqualified
stock options (the "Options") to purchase 750,000 shares of AVT common stock
with an exercise price per share equal to the average of the high and low
trading prices of AVT common stock on the date of grant. Additional options may
be granted annually by the Board of Directors and shall be granted based upon
Employee's performance. The Options will vest over a four year period with the
first 25% (187,500 shares) vested on the first anniversary of the date of grant,
and with 2.0833% of the total shares (15,625 shares) vested each month
thereafter until 100% of such Option shares are fully vested. Notwithstanding
the foregoing, if Executive's employment is terminated prior to the first
anniversary of the Commencement Date for any reason (including due to death or
"total disability" of the Executive) other than by the Board of Directors of AVT
with "Cause," all of the Options that would otherwise have vested on the first
anniversary of the date of grant will be deemed vested on a pro-rata basis over
the first year of employment based on the number of full calendar months
actually served. The Options will be granted pursuant to an Option Agreement
consistent with the terms hereof and will in all respects not specified by the
terms of this Agreement or the Option Agreement be subject to the same terms and
conditions as are set forth in the AVT 1989 Restated Employee Stock Option Plan,
attached hereto as Exhibit A.
5. Benefits
During the term of this Agreement, Executive will be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in fringe benefit programs generally available to employees of
Employer or executives of Employer, as those programs may currently exist or be
modified from time to time. Also, Executive will be entitled to receive an
allowance of $250 per month in reimbursement for club memberships and fees.
6. Termination
Employment of Executive pursuant to this Agreement may be terminated as
follows, but in any case the provisions of Section 8 hereof shall survive the
termination of this Agreement and the termination of Executive's employment
hereunder to the extent provided therein:
6.1 By Employer
With or without Cause (as hereinafter defined), Employer may terminate
Executive's employment at any time during the term of employment upon giving
Notice of Termination (as hereinafter defined).
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6.2 By Executive
Executive may terminate his employment at any time, with or without Good
Reason (as hereinafter defined), upon giving Notice of Termination.
6.3 Automatic Termination
This Agreement and Executive's employment hereunder will terminate
automatically upon Executive's death or total disability. The term "total
disability" as used herein means a physical or mental illness, loss of legal
capacity or any other cause beyond Executive's control that substantially
impairs or prevents Executive from performing his duties hereunder for a period
that can reasonably be expected to be of long or indefinite duration, as
determined in good faith by Employer's Board of Directors, unless Executive is
granted a leave of absence by Employer's Board of Directors. Executive and
Employer hereby acknowledge that Executive's ability to perform the duties
specified in Section 1 hereof is of the essence of this Agreement. Termination
hereunder will be deemed to be effective (a) at the end of the calendar month in
which Executive's death occurs or (b) immediately upon a determination by
Employer's Board of Directors of Executive's total disability, as defined
herein.
6.4 Notice
The term "Notice of Termination" means at least 14 days' written notice of
termination of Executive's employment, during which period Executive's
employment and performance of services will continue; provided, however, that
Employer may, upon notice to Executive and without reducing Executive's
compensation during such period, excuse Executive from any or all of his duties
during such period. The effective date of the termination of Executive's
employment hereunder shall be the date of termination set forth in such written
notice.
7. Termination Payments
in the event of termination of Executive's employment, all compensation
and benefits set forth in this Agreement will terminate as of the last date of
employment, except as specifically provided in this Section 7:
7.1 Termination by Employer
(a) Without Cause.
If Employer terminates Executive's employment without Cause prior to the
end of the term of this Agreement, Executive will be entitled to receive, in a
lump sum payment due on the date of termination, the sum of (i) an amount equal
to the lesser of (aa) one-year of
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Executive's then-current annual base salary and (bb) the annual base salary
Executive would have received if his employment hereunder had continued until
the end of the term of this Agreement; (ii) any unpaid annual base salary that
has accrued or is otherwise payable for services already performed as of the
date of termination; and (iii) the amount of any Objective Bonus and/or MIP
Bonus described in Section 4.2 hereof that has been earned by Executive prior to
the date of termination but has not yet been paid to Executive as of such date.
In addition to payments made under 7.1(a)(i), (ii), and (iii), Executive shall
be entitled to receive (1) the Objective Bonus described in Section 4.2 hereof
for the calendar year of termination, payable for all fully achieved objectives
as if Executive were still employed by Employer at the dates of determination
set forth therein, and (2) a portion of the MIP Bonus as described in Section
4.2 calculated as follows: AVT's actual financial performance on the date of
termination shall be annualized and compared against the annual financial
performance target as specified in the MIP Plan. This ratio will be referred to
as the Performance Ratio. If the Performance Ratio is at least 70%, then
Executive shall be entitled to a portion of the MIP bonus, such portion to be
determined by multiplying the MIP Bonus (Section 4.2) by the Performance Ratio
and then by multiplying that number by the number of completed calendar months
of service divided by twelve (12). Executive shall also receive Medical, Dental,
Vision, Life, Short and Long Term Disability Insurance for a period of 12 months
from date of termination for Executive and any dependents covered under
Executive's insurance while Executive was employed.
(b) With Cause. If Employer terminates Executive's employment with Cause
prior to the end of the term of this Agreement, Executive will not be entitled
to receive any of the foregoing benefits, other than those set forth in clause
(a)(ii) above.
7.2 Termination by Executive
(a) With Good Reason. If Executive terminates his employment for Good
Reason prior to the end of the term of this Agreement, Executive will be
entitled to receive all of the payments and other benefits set forth in Section
7.1(a) hereof.
(b) Without Good Reason. If Executive terminates his employment for any
reason other than Good Reason prior to the end of the term of this Agreement,
Executive will not be entitled to any payments hereunder, other than those set
forth in clause (ii) of Section 7.1(a) hereof.
7.3 Expiration of Term or Termination Because of Death or Total
Disability
In the case of the termination of Executive's employment as a result of
the expiration of the term of this Agreement or because of his death or total
disability as defined above,
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Executive (or his estate) shall be entitled to receive the payments set forth in
clause (ii) of Section 7.1(a) hereof plus a portion of the Objective Bonus and
MIP Bonus as provided in Section 7.1(a).
7.4 Change in Control
A Change in Control, in and of itself, shall not constitute a termination
hereunder nor shall it obligate AVT to make any termination payments hereunder,
unless such Change in Control results in a termination of Executive's employment
that would otherwise entitle him to such payments hereunder. The term "Change in
Control" means (a) any person or group is or becomes the beneficial owner,
directly or indirectly, of securities of AVT representing fifty percent (50%) or
more of the combined voting power of AVT's then outstanding securities; or (b)
the stockholders of AVT approve a merger or consolidation of AVT with any other
corporation; except a merger or consolidation that results in the voting
securities of AVT continuing to represent more than fifty percent (50%) of the
combined voting power of the voting securities of AVT or such surviving entity;
or (c) the stockholders of AVT approve a plan of complete liquidation of AVT or
an agreement for the sale or disposition by AVT of all or substantially all of
its assets.
7.5 Certain Definitions
(a) Cause. Wherever reference is made in this Agreement to termination
being with or without Cause, "Cause" means the occurrence of one or more of the
following events without the written consent of Employer:
(i) Executive's willful material misconduct or dishonesty in the
performance of, or the willful failure to perform, any material duty under this
Agreement;
(ii) Executive's willful injury of Employer, or Executive's breach
of fiduciary duty to Employer involving personal profit;
(iii) Conviction of Executive of the violation of a state or federal
criminal law involving the commission of a crime against Employer or any felony;
(iv) Habitual or repeated misuse by Executive of alcohol or
controlled substances that materially impairs Executive's ability to
perform his duties under this Agreement;
(v) Any material and willful violation by Executive of any
provisions of Sections 8.2 - 8.6 of this Agreement; or
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(vi) Any past or present act of Executive involving moral turpitude
adversely affecting the business, goodwill or reputation of Employer, or
materially and adversely affecting Executive's ability to effectively represent
Employer with the public.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until Executive has been given written notice
from the Board of Directors of Employer of the alleged ground or grounds for a
proposed termination for Cause, and an opportunity to cure in accordance with
Section 10 hereof, and has failed to effect such cure within the time permitted
therefor.
(b) Good Reason. Wherever reference is made in this Agreement to
termination being with or without "Good Reason," "Good Reason" means the
occurrence of any of the following without the written consent of Executive:
(i) the assignment to Executive of duties materially inconsistent
with or detrimental to, Executive's position, authority, duties or
responsibilities as contemplated by Section 1 hereof; provided, however, that
the reduction of Executive's position, authority, duties and responsibilities by
Employer following Executive's written notice to Employer that he intends to
resign his position with Employer without Good Reason shall not constitute "Good
Reason" under this Agreement;
(ii) Employer requiring the Executive to be based at any office or
location other than in the Seattle, WA area, or;
(iii) Any material violation by Employer of any provision of this
Agreement.
(c) Willful. For purposes of Sections 7.5(a)(i) and (ii), an act, or
omission to act, on Executive's part shall be considered "willful" only if done,
or omitted to be done, by him not in good faith or without reasonable belief
that his action or omission was in the best interest of Employer; provided, that
any act, or omission to act, on Executive's part in reliance upon an opinion of
counsel to Employer or counsel to Executive shall not be deemed to be willful.
8. Noncompetition and Nonsolicitation
8.1 Applicability
This Section 8 will survive the termination of Executive's employment with
Employer or the expiration of the term of this Agreement to the extent provided
herein. Executive agrees that the duration and scope of his obligations under
this Section 8 are reasonable.
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8.2 Scope of Competition
Executive agrees that he will not, during his employment and for a period
of (a) one year from the date on which his employment is terminated if it is
terminated by Employer without Cause or is terminated by Executive for Good
Reason and (b) two years from the date on which his employment is terminated if
it is terminated by Employer for Cause or by Executive without Good Reason, be
employed by, consult with or otherwise perform services for, own, manage,
operate, control or participate in the ownership, management, operation or
control of, any Competitor unless released from such obligation in writing by
Employer's Board of Directors. A "Competitor" means any entity that competes
with Employer in the production, marketing or distribution of products that
compete with products then produced by Employer. Executive shall be deemed to be
related to or connected with a Competitor if such Competitor is (a) a
partnership in which he is a general or limited partner or employee, (b) a
corporation or association of which he is a shareholder, officer, employee or
director, or (c) a partnership, corporation or association of which he is a
member, consultant or agent; provided, however, that nothing herein will prevent
the purchase or ownership by Executive of shares that constitute less than 5% of
the outstanding equity securities of a publicly or privately held corporation,
if Executive had no other relationship with such corporation prohibited by this
Section 8.
8.3 Scope of Nonsolicitation
Executive will not directly or indirectly solicit, influence or entice, or
attempt to solicit, influence or entice, any employee or consultant of Employer
to terminate his or her relationship with Employer, or solicit, influence or
entice any customer, distributor, partner, joint venturer or supplier of
Employer to do business or in any way become associated with any Competitor in
lieu of doing business with Employer. This Section 8.3 will apply only during
the time period described in Section 8.2 hereof.
8.4 Assignment of Intellectual Property
All concepts, designs, machines, devices, uses, processes, technology,
trade secrets, works of authorship, customer lists, plans, embodiments,
inventions, improvements or related work product (collectively, "Intellectual
Property") that Executive develops, conceives or first reduces to practice
during the term of his employment hereunder, whether working alone or with
others, shall be Employer's sole and exclusive property, together with any and
all Intellectual Property rights, including, without limitation, patent or
copyright rights, relating thereto, and Executive hereby assigns to Employer all
of such Intellectual Property. "Intellectual Property" shall include only such
concepts, designs, machines, devices, uses, processes, technology, trade
secrets, works of authorship, customer lists, plans, embodiments, inventions,
improvements and related work product that (a) relate to Executive's performance
of services under this Agreement, to Employer's field of business or
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to Employer's actual or demonstrably anticipated research or development,
whether or not developed, conceived or first reduced to practice during normal
business hours or with the use of any equipment, supplies, facilities or trade
secret information or other resource of Employer or (b) are developed in whole
or in part on Employer's time or developed using Employer's equipment, supplies,
facilities or trade secret information, or other resources of Employer, whether
or not the work product relates to Employer's field of business or Employer's
actual or demonstrably anticipated research.
8.5 Disclosure and Protection of Inventions
In the event that Executive develops in the course of his employment with
Employer any material item of Intellectual Property that is the property of
Employer under Section 8.4 hereof, Executive shall disclose to and assist
Employer or its designee in efforts to protect all rights relating to such
Intellectual Property. Such assistance may include, without limitation, the
following: (a) making application in the United States and in foreign counties
for a patent or copyright on any work products specified by Employer; (b)
executing documents of assignment to Employer or its designee of all of
Executive's right, title and interest in and to any work product and related
intellectual property rights; and (c) taking such additional action (including,
without limitation, the execution and delivery of documents) to perfect,
evidence or vest in Employer or its designee all right, title and interest in
and to any Intellectual Property and any rights relating thereto.
8.6 Nondisclosure; Return of Materials
During the term of his employment by Employer and following termination of
such employment, Executive will not disclose (except as required by, in
furtherance of or otherwise consistent with his duties to Employer) any
confidential concept, design, process, technology, trade secret, customer list,
plan, embodiment or invention, any other Intellectual Property or any other
confidential information, whether patentable or not, of Employer of which
Executive becomes informed or aware during his employment, whether or not
developed by Executive. In the event of the termination of his employment with
Employer or the expiration of this Agreement, Executive will return all
confidential documents, data and other materials of whatever nature, including,
without limitation, drawings, specifications, research, reports, embodiments,
software and manuals to Employer that pertain to his employment with Employer or
to any Intellectual Property, and shall not retain or cause any third party to
retain photocopies or other reproductions of the foregoing.
8.7 Equitable Relief
Executive acknowledges that the provisions of this Section 8 are essential
to Employer, that Employer would not enter into this Agreement if it did not
include this Section 8 and that damages sustained by Employer as a result of a
breach of this Section 8
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cannot be adequately remedied by traditional legal recourse, and Executive
agrees that Employer, notwithstanding any other provision of this Agreement,
including, without limitation, Section 14 hereof, in addition to any other
remedy it may have under this Agreement or at law, will be entitled to
injunctive and other equitable relief to prevent or curtail any breach of any
provision of Section 8.
8.8 Effect of Violation
Executive and Employer acknowledge and agree that additional consideration
has been given for Executive's entering into this Section 8, such additional
consideration including, without limitation, certain provisions for termination
payments pursuant to Section 7. If Executive is terminated with Cause, such
termination shall not relieve Executive of his obligations, as required
hereunder, not to compete.
8.9 Definition of Employer
For purposes of Sections 8.2 and 8.3 hereof, "Employer" shall include all
subsidiaries of Employer, and any business ventures in which Employer or its
subsidiaries may participate during the term of Executive's employment
hereunder.
9. Representations and Warranties
To induce Employer to enter into this Agreement, Executive represents and
warrants to Employer as follows:
9.1 Qualification
Executive is qualified and capable, with or without reasonable
accommodation, of performing all the essential functions of his position under
this Agreement and of fulfilling his obligations hereunder.
9.2 No Violation of Other Agreements
Neither the execution nor the performance of this Agreement by Executive
will violate or conflict in any way with any other agreement by which Executive
may be bound.
9.3 No Violation of Law
To the best of Executive's knowledge, neither the execution nor the
performance of this Agreement by Executive will violate any duties imposed on
Executive by corporate or other statutory or common law arising out of
Executive's past employment or other business activities.
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10. Notice and Cure of Breach
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of "Cause" set forth in
Section 7.5(a)(iii) hereof, before such action is taken, the party asserting the
breach of this Agreement shall give the other party at least 14 days' prior
written notice of the existence and nature of such breach before taking further
action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during such period.
11. Notices
Any notice or request required or permitted to be given hereunder must be
in writing given by personal delivery, overnight courier, certified or
registered mail or facsimile, addressed as respectively set forth below or to
such other address as any party has previously designated by such a notice. The
effective date of any notice or request is (a) three days from the date it is
sent by certified or registered mail so long as it is in fact received within
five days, (b) the date of delivery if personally delivered or sent by overnight
courier, or (c) when sent by facsimile with receipt confirmed.
Notices to Executive and Employer shall be sent as follows:
If to Executive: If to Employer:
Xxxxx X. Xxxxxxxx AVT Corporation.
00000 XX 00xx Xxxxx 11410 N.E. 122nd Way
Bellevue, WA 98006 Xxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. XxXxxxx
00. Assignment
This Agreement is personal to Executive and shall not be assignable by
Executive. Employer may assign its rights and obligations hereunder to (a) any
corporation resulting from any merger, consolidation or other reorganization to
which Employer is a party or (b) any corporation, partnership, association or
other person to which Employer may transfer all or substantially all the assets
and business of Employer existing at such time. All the terms and provisions of
this Agreement shall be binding on and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
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13. Waivers
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, will constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance will not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
14. Arbitration
With the exception of proceedings by Employer to enforce its rights under
Section 8 hereof, any controversies or claims arising out of or relating to this
Agreement shall be fully and finally settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then in
effect (the "AAA Rules"), conducted by one arbitrator either mutually agreed
upon by Employer and Executive or chosen in accordance with the AAA Rules,
except that the parties thereto shall have any right to discovery as would be
permitted by the Federal Rules of Civil Procedure for a period of 90 days
following the commencement of such arbitration proceedings and the arbitrator
thereof shall resolve any dispute that arises in connection with such discovery.
The prevailing party shall be entitled to costs and expenses, including
attorneys' fees, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
15. Amendments in Writing
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, will be effective unless the same is in writing, specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by Employer and Executive, and each
such amendment, modification, waiver, termination or discharge will be effective
only in the specific instance and for the specific purpose for which given. No
provision of this Agreement will be varied, contradicted or explained by any
oral agreement, course of dealing or performance or any other matter not set
forth in an agreement in writing and signed by Employer and Executive.
16. Governing Law
This Agreement will be governed by and construed and enforced in
accordance with the internal laws of the state of Washington, without regard to
any rules governing conflicts of laws.
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17. Severability
If any provision of this Agreement is held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof will remain in full force and
effect in such jurisdiction and will be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability will not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover will have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
18. Headings
All headings used herein are for convenience only and will not in any way
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
19. Counterparts
This Agreement, and any amendment or modification entered into pursuant to
Section 15 hereof, may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
20. Entire Agreement
This Agreement on and as of the date hereof constitutes the entire
agreement between Employer and Executive with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between Employer and Executive with respect to such
subject matter are hereby superseded and nullified in their entireties.
21. Legal Expenses
As represented and warranted in Section 9.2, Executive's participation in
this Agreement and his obligations hereunder shall not violate any other
agreement by which Executive is bound. However, AVT recognizes that Executive
may need assistance in his transition from his current employer. Therefore, in
the event of any claim or threatened claim by Executive's existing employer or
any stockholder or other security holder of Executive's existing employer (a
"Claim") related to Executive's actions within his scope of employment, AVT
agrees to provide a loan of up to $100,000 (the interest bearing rate will be
the minimum annual statutory rate required for Federal income tax purposes) to
be used
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solely for legal expenses incurred in Executive's defense of any such Claim;
provided that Executive's existing employer does not carry insurance that covers
the costs of such Claim and provided that such Claim does not involve fraudulent
actions on Executive's part. In the case of a Claim involving a violation of law
or fraudulent actions, any loan to assist with legal expenses shall be at the
Board of Directors sole discretion.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Employment Agreement on the date first set forth above.
EXECUTIVE: AVT Corporation
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxxx X. XxXxxxx
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Xxxxx X. Xxxxxxxx 10/26/00 Xxxxxxx X. XxXxxxx
Chairman of the Board
