EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of February 2, 1998, is made and entered into by
and between CELL ROBOTICS INTERNATIONAL, INC., a Colorado corporation
("Company") and XX. XXXXXX X. XXXXXXXX ("Executive"). For the definition of
certain terms used in this Agreement, see Section 6 below.
The Company and Executive agree as follows:
Section 1. Employment.
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1.1. Engagement.
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The Company will employ Executive, and Executive will accept
employment, as an Executive of Company for the Term, subject to and in
accordance with the provisions of this Agreement.
1.2. Duties.
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During the Term, Executive will serve Company in the capacity of
Chairman of the Board of Directors, President and Chief Executive Officer of
the Company, or such other capacity as may be designated by the Board.
Executive's duties as an Executive of Company include all of the duties
normally associated with such capacity. Executive's duties will also include
such other activities, responsibilities and duties as may reasonably be
assigned from time to time by the Board. If Executive is elected or
appointed by the Board as an officer or other position with Company, Executive
will perform the duties of such position as described in the Company's bylaws
or as determined from time to time by the Board.
1.3. Attention and Effort.
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During normal business hours, for such periods of time as the
Company has specific projects assigned to Executive, Executive will devote
Executive's best efforts, entire productive time, ability and attention to the
business of Company. Further, during the Term, Executive will not, without
Company's prior written consent, directly or indirectly engage in any
employment, consulting or other activity which would interfere or conflict
with the performance of Executive's duties or obligations to Company or which
would directly or indirectly compete with Company.
Section 2. Compensation.
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2.1. Base Salary.
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During the Term, Company will pay Executive a base salary equal
to $123,000 per annum, payable in equal bi-weekly or semi-monthly installments
in accordance with the Company's payroll system. The Board will review, at
least annually, the Executive's compensation with a view to increasing it if,
in the sole judgment of the Board, the performance of the Company, the
services of the Executive and compensation paid by other companies engaged in
businesses comparable to the business of the Company to executives in
comparable positions merit such an increase.
2.2. Incentive Compensation.
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In addition to base salary described in paragraph 2.1, Executive
may be entitled to receive such bonuses and other compensation as may be
determined by the Board (e.g., pursuant to such bonus, stock and other
incentive compensation plans as may be adopted and maintained by Company
during the Term).
2.3 Stock Incentive Plan.
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The Company shall use its best efforts maintain its Stock
Incentive Plan pursuant to which the Company is authorized to issue incentive
stock options qualified under Section 422 of the Internal Revenue Code of
1986, as amended ("Stock Plan"). Executives shall be entitled and eligible to
participate in the Stock Plan as an executive officer and key Executive of the
Company on the same basis as other executive officers of the Company, as
determined and modified from time to time by the Board of Directors. All
incentive stock options granted to Executive pursuant to the Stock Plan shall
permit the cashless exercise of such options in conformity with applicable
legal requirements. The Company agrees to use its best efforts to cause the
Stock Plan, together with all shares of the Company's common stock issuable
upon exercise of options granted under the Stock Plan, to be registered under
the Securities Act of 1933, as amended ("Securities Act").
2.4. Benefits.
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During the Term, Executive will be entitled to participate in
such fringe benefit programs (e.g., medical, dental, disability, life
insurance and vacation programs) as may be provided from time to time by the
Board or any person or committee appointed by the Board to determine fringe
benefit programs, all subject to and in accordance with the eligibility and
other requirements of such programs.
2.5. Expenses.
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During the Term, Company will reimburse Executive for reasonable
out-of-pocket expenses incurred by Executive in performance of service for
Company under this Agreement (e.g., transportation, lodging and food expenses
incurred while traveling on Company business), all subject to such policies
and other requirements as Company may from time to time establish for its
Executives generally.
2.6. Withholding and Offset.
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Payment of the base salary and any other amounts to Executive
will be subject to such withholding and offset as may be provided by
applicable law (e.g., for income tax purposes) or consented to by Executive.
2.7. Indemnification.
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Subject to applicable law, the Company shall indemnify and hold
Executive harmless from any and all loss, judgments or claims Executive may
suffer in the proper discharge of Executive's duties hereunder, including, but
not limited to attorney's fees and court costs.
Section 3. Term and Termination.
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3.1. Commencement.
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The Term will commence on the date of this Agreement.
3.2. Termination.
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The Term will terminate upon the first of the following to occur:
(a) Company's termination of Executive's Employment for Cause pursuant to
paragraph 3.3; (b) Company's termination of Executive's employment without
Cause pursuant to paragraph 3.4; (c) Executive resigns from employment as an
Executive of Company pursuant to paragraph 3.5; (d) Executive terminates his
employment for Cause pursuant to paragraph 3.6; (e) the death of Executive; or
(f) the disability of Executive resulting from injury, illness or disease,
whether of a mental or physical nature, which substantially impairs or
prevents the ability of Executive to satisfactorily perform Executive's duties
and obligations under this Agreement for a period of 90 days; (g) the Change
in Control of the Company or (h) five (5) years from the commencement date.
If the Executive is terminated pursuant to subparagraphs 3.2(a), (c), (e), (f)
or (h), the Executive shall be entitled to no additional compensation under
Section 2 herein. However, if an Executive is terminated pursuant to
subparagraphs 3.2(b), (d) or (g), Executive shall be entitled to receive the
Termination Payments provided for in Section 3.9 below.
3.3. Termination for Cause.
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Company may at any time terminate Executive's employment for
Cause without prior notice.
3.4. Termination Without Cause.
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Company may at any time terminate Executive's employment with or
without Cause by giving Executive notice of the same at least thirty (30) days
prior to the effective date of such termination.
3.5. Resignation.
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Executive may at any time resign from employment with Company by
giving Company notice of thirty (30) days prior to the effective date of such
termination.
3.6. Termination For Cause By Executive.
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Executive may at any time terminate Executive's employment for
Cause without prior notice.
3.7. Termination Due to Change in Control.
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Executive may terminate Executive's employment due to a Change in
Control without prior notice.
3.8. Disability.
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If in the event of a disability described in paragraph 3.2(f)
Company decides not to terminate Executive's employment and Executive is
entitled to receive payments (i.e., in lieu of wages or other compensation for
employment) on account of such disability under any fringe benefit program
provided by Company, then the base salary described in paragraph 2.1 will be
reduced to the extent of such entitlement.
3.9. Termination Payments.
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In the event the Executive's employment is terminated pursuant to
paragraph 3.4, 3.6 or 3.7, the Company shall be obligated to pay to Executive
Termination Payments equal to two (2) times, in the aggregate, the product of
(i) the Executive's average annualized total compensation under this
Agreement, including base salary, incentive compensation, commissions,
bonuses, fringe benefits and other forms of compensation, during the two most
recent taxable years (or to the date of the commencement set forth in Section
3.1, if less than two years). Such Termination Payments shall be due and
payable in twelve (12) equal monthly installments commencing one month after
the date of such Termination.
3.10. Return of Company Property.
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Upon termination of the Term, Executive will deliver to Company
any and all property of Company which is in Executive's possession or control
(including, but not limited to, any and all Materials).
3.11. Survival.
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Sections 4 and 5, together with all other provisions of this
Agreement that may reasonably be interpreted or construed to survive any
termination of the Term, will survive any termination of the Term.
Section 4. Confidentiality.
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4.1. Confidential Information.
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In the course of Executive's employment with Company, Executive
will have access to certain Confidential Information. Executive will use and
disclose Confidential Information solely for the purposes for which it is
provided and will take reasonable precautions to prevent any unauthorized use
or disclosure of the same. Executive will not use or disclose any
Confidential Information (a) other than as required in the course of
Executive's employment with Company, (b) for Executive's own personal gain, or
(c) in any manner contrary to the best interests of Company.
4.2. Proprietary Information of Others.
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Executive will not use in the course of Executive's employment
with Company, or disclose or otherwise make available to Company any
information, documents or other items which Executive may have received from
any other person (e.g., a prior employer) and which Executive is prohibited
from so using, disclosing or making available (e.g., by reason of any
contract, court order, law or obligation by which Executive is bound).
4.3. Work Product.
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All Work Product which Executive conceives, develops or first
reduces to practice, either alone or with others, during the Term will be the
sole and exclusive property of Company, together with any and all related
Intellectual Property Rights. The foregoing applies to all Work Product which
relates to Executive's performance of services under this Agreement, Company's
Field of Business or Company's actual or demonstrably anticipated research or
development and whether or not such Work Products are conceived, developed or
first reduced to practice during normal business hours or with the use of any
equipment, supplies, facilities, personnel, Confidential Information or other
resource of Company.
4.4. Disclosure and Protection of Work Products.
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Executive will disclose all Work Products described in
paragraph 4.3 to Company, promptly and in writing. At Company's request and
at Company's expense, Executive will assist Company or its designee in efforts
to protect such Work Products. Such assistance may include, but is not
necessarily limited to, the following: (a) making application in the United
States and in foreign countries for a patent or copyright on any Work Products
specified by Company; (b) executing documents of assignment to Company or its
designee of all Executive's right, title and interest in and to any Work
Product and related Intellectual Property Rights; and (c) taking such
additional action (including, but not limited to, the execution and delivery
of documents) to perfect, evidence or vest in Company or its designee all
rights, title and interest in and to any Work Product and any related
Intellectual Property Right.
4.5. Materials.
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All Materials and related Intellectual Property Rights will be
the sole and exclusive property of Company, whether or not such Materials are
marked with any Intellectual Property Right notice of Company or Executive.
All such Materials authored, made, conceived or developed by Executive or made
available to Executive (or any copies or extracts thereof) will be held by
Executive in trust solely for the benefit of Company. Executive will use such
Materials only as required in the course of Executive's employment with
Company or as otherwise authorized in writing by Company.
4.6. Notice.
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This Agreement does not apply to any invention for which no
equipment, supplies, facility or trade secret information of Company was used,
and which was developed entirely on Executive's own time, unless: (a) the
invention relates (i) directly to the Company or (ii) to Company's actual or
demonstrable anticipated research or development; or (b) the invention results
from any work performed by Executive for Company.
Section 5. Noncompetition and Nonsolicitation.
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5.1. Noncompetition.
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During the Term and for a period of two (2) years after the end
of the Term, Executive will not directly or indirectly be employed by, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of or be connected with any business activity which is
within Company's Field of Business. For purposes of the foregoing, Executive
will be deemed to be connected with such business if the business is carried
on by: (a) a partnership in which the Executive is general or limited
partner; (b) a corporation of which Executive is a shareholder(other than a
shareholder owning less than 5% of the total outstanding shares of the
corporation), officer, or director; or is an Executive, consultant, agent,
member or other representative.
5.2. Nonsolicitation.
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During the Term and for a period of two (2) years after the end
of the Term, Executive will not directly or indirectly solicit or entice any
of the following to cease, terminate or reduce any relationship with Company
or to divert any business from Company; (a) any employee, consultant or
representative of Company; (b) any contractor or supplier of Company; (c) any
customer or client of Company; or (d) any prospective customer or client from
which Executive solicited business within the last year of the Term. Further,
Executive will not directly or indirectly disclose the names, dresses,
telephone numbers, compensation, or arrangements between Company and any
person or entity described in (a), (b) or (c) above to any competitor of
Company.
Section 6. Definitions.
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Whenever used in this Agreement with initial letters capitalized, the
following terms will have the following specified meanings:
6.1. "Board" means Company's Board of Directors.
6.2. "Cause" for purposes of paragraph 3.3, shall include the
occurrence of any of the following:
a. The Executive commits a material breach of the terms of this
Agreement, which shall remain uncured for a period of thirty (30) days after
written notice by the Company of such breach.
b. The Executive is shown to have engaged in any act of
dishonesty detrimental to the Company, or fraud upon the Corporation, any of
its affiliated companies, or any of its customers or clients;
c. The Executive fails to devote his full time, attention and
efforts to the business and affairs of the Corporation or its affiliated
companies which condition remains uncured for a period of thirty (30) days
after written notice by the Company; or
d. The Executive has been grossly negligent in the performance
of his employment duties or responsibilities which condition remains uncured
for a period of thirty (30) days after written notice by the Company.
6.3. "Cause," for purposes of paragraph 3.6, shall include the
occurrence of any of the following:
a. The breach or violation by the Company of the any of the
material terms of this Agreement, which shall remain uncured for a period of
thirty (30) days of written notice by Executive of such breach;
b. Any significant change in position, duties and
responsibilities of Executive to which the Executive does not consent;
c. Any move of the Company or its principal officers resulting
in or any other requirement that the Executive, without his consent, change
his principal residence.
d. The Company has shown to have engaged in any active material
dishonesty or fraud upon the Executive.
e. There shall occur a Change of Control of the Company.
6.4. "Change of Control" means any transaction of the Company
involving (i) the merger or consolidation of the Company into or with another
entity where the Company's shareholders receive less than 50% of the
outstanding voting securities of the new or continuing entity, (ii) the sale
of all or substantially all of the Company's assets, (iii) any person not
already a stockholder of the Company becoming a beneficial owner, directly or
indirectly, of the securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities, (iv) a
change in the majority of the Board of Directors of the Company, or (v) the
Company terminating its business or liquidating its assets.
6.5. "C.E.O." means Company's Chief Executive Officer.
6.6. "Company's Field of Business" means any of the fields of the
Company's business. On the date of the Agreement, Company's Field of Business
includes, but is not necessarily limited to, the following: research,
development, manufacturing, use, licensing, sale and distribution of
instruments and their components.
6.7. "Confidential Information" means any information that is
confidential, proprietary or trade secret information of Company or any of its
customer or clients or any other information the use of disclosure of which by
Company is prohibited or restricted (e.g., by reason of any contract, court
order, law or other obligation by which Company is bound). "Confidential
Information" may include, but is not necessarily limited to, technology,
computer programs, business plans, marketing plans, information as to existing
or future products or services of Company, financial projections, unpublished
works of original authorship, customer lists, financial information, and trade
secrets.
Notwithstanding the foregoing, the restrictions on disclosure and
use of information and materials as set forth in Section 4 shall not apply to
the following, and the following is not confidential or proprietary
information: (1) any information or materials which were generally available
to the public at the time made available to Executive by the Company; (2) any
information or materials which become, without breach of Section 4 and through
no fault of Executive, generally available to the public; (3) any information
or materials which Executive has received from other sources prior to the date
of this Agreement, subject to no restrictions on disclosure applicable to
Executive; and (4) any information or materials which Executive at any time
lawfully obtains from a third party who is not under any obligation of secrecy
or confidentiality to the Company, under circumstances permitting disclosure
by Executive to others without restriction.
6.8. "Intellectual Property Right" means any patent, copyright, trade
secret, trade name, trademark or other intellectual property right.
6.9. "Materials" means hardware, software, programs, manuals,
drawings, designs, articles, writings, data, notes, memorandum, manuscripts,
notebooks, proposals, work plans, interim and final reports, project files,
client contract records and other tangible manifestations of any Confidential
Information or Work Products.
6.10. "President" means Company's President.
6.11. "Term" means the term of Executive's employment as an Executive
of Company pursuant to this Agreement.
6.12. "Work Product" means any invention, discovery, concept or idea
(including, but not necessarily limited to, hardware, software programs, or
processes, techniques, know-how, methods, systems, improvements, analytical
reports, and other developments).
Section 7. Miscellaneous.
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7.1. Compliance with Laws.
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In the performance of this Agreement, each party will comply with
all applicable laws, regulations, rules, orders and other requirements of
governmental authorities having jurisdiction.
7.2. Equitable Relief.
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Executive acknowledges that: the provisions of Sections 4 and 5
are essential to Company; Company would not enter into this Agreement if it
did not include such provisions; the damages sustained by Company as a result
of any breach of such provisions cannot be adequately remedied by damages;
and, in addition to any other right or remedy that Company may have (e.g.,
under this Agreement, by law or otherwise), Company will be entitled to
injunctive and other equitable relief to prevent or curtail any breach of any
such provisions.
7.3. Nonwaiver.
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The failure of either party to insist upon or enforce strict
performance by the other of any provision of this Agreement or to exercise any
right, remedy or provision of this Agreement will not be interpreted or
construed as a waiver or relinquishment to any extent of such party's right to
consent or rely upon the same in that or any other instance; rather, the same
will be and remain in full force and effect.
7.4. Entire Agreement.
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This Agreement constitutes the Entire Agreement, and supersedes
any and all prior Agreements, between Company and Executive. No amendment,
modification or waiver of any of the provisions of this Agreement will be
valid unless set forth in a written instrument signed by the party to be bound
thereby.
7.5. Applicable Law.
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This Agreement will be interpreted, construed and enforced in all
respects in accordance with the local laws of the State of New Mexico, without
reference to its choice of law rules.
7.6. Attorneys Fees.
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In the event that either party consults or retains an attorney to
enforce the terms of this Agreement, the prevailing party in any such dispute
or litigation shall be entitled to recover from the other party its reasonable
attorneys fees and costs incurred.
7.7. Severability.
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If any of the provisions of this Agreement are held to be invalid
or unenforceable, the remaining provisions shall nevertheless continue to be
valid and enforceable to the extent permitted by law.
Company: CELL ROBOTICS INTERNATIONAL, INC., a Colorado
corporation
By: _____________________________________________
Its: ____________________________________________
Executive: _________________________________________________
Xx. Xxxxxx X. Xxxxxxxx
