EXHIBIT 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is dated as of the 1st day of
August, 1997, between Photran Corporation, a Minnesota corporation ("Company"),
and ▇▇▇▇ ▇. ▇▇▇▇, a Minnesota resident ("Executive").
R E C I T A L S
A. Executive is presently employed by the Company in the
capacity of President and Chief Executive Officer.
B. Executive possesses certain unique skills, talents,
contacts, judgment and knowledge of the Company's businesses, strategies,
ethics and objectives.
C. In order to provide for continuity in the executive
management of the Company, which continuity is deemed to be vital to the
continued growth and success of the Company, and in order that the Company
may continue to avail itself of the unique skills, talents, contacts,
judgment and knowledge of Executive, the Company desires to ensure the
retention of Executive in the employ of the Company.
D. Executive desires to be assured of a secure tenure with the
Company, duties and responsibilities commensurate with Executive's education,
experience and background, and salary, bonus, incentive compensation and
other benefits and perquisites at levels that reflect Executive's anticipated
future contributions to the Company.
In consideration of the foregoing premises and the parties' mutual
covenants and undertakings contained in this Agreement, the Company and
Executive agree as follows:
ARTICLE I. DEFINITIONS
Capitalized terms used in this Agreement shall have their defined
meaning throughout the Agreement. The following terms shall have the meanings
set forth below, unless the context clearly requires otherwise.
1.1 "AGREEMENT" means this Executive Employment Agreement, as
from time to time amended.
1.2 "BASE SALARY" means the total annual cash compensation
payable on a regular periodic basis, without regard to voluntary or mandatory
deferrals, as set forth at paragraph 3.1 of this Agreement.
1.3 "BENEFICIARY" means the person or persons designated in
writing to the Company by Executive to receive benefits payable after
Executive's death pursuant to paragraph 3.7 or 3.8 of this Agreement. In the
absence of such designation or in the event that all of the persons so
designated predecease Executive, Beneficiary means the executor,
administrator or personal representative of Executive's estate.
1.4 "BOARD" means the Board of Directors of the Company.
1.5 "CAUSE" has the meaning set forth at paragraph 4.2 of this
Agreement.
1.6 "CHANGE IN CONTROL" shall mean any of the following events:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, the acquisition of Voting
Securities in a "Non-Control Acquisition" (as hereinafter defined)
shall not cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (i) an employee benefit plan (or a trust forming
a part thereof) maintained by the Company, (ii) the Company, or (iii)
any Person in connection with a Non-Control Transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person acquired Beneficial Ownership of
more
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than the permitted amount of the outstanding Voting Securities as
a result of the acquisition of Voting Securities by the Company which,
by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the Company, the
Subject Person becomes the Beneficial Owner of any additional Voting
Securities which increases the percentage of the then outstanding
Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
(b) During any period of two consecutive years,
individuals who at the beginning of such period constitute the
entire Board of Directors (the "Incumbent Board") cease for any
reason to constitute a majority thereof; provided, however, that if
the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the
Incumbent Board.
(c) Approval by stockholders of the Company if
required, or if not required the approval by the Board, of:
(i) a merger, consolidation, or
reorganization involving the Company, unless such merger,
consolidation, or reorganization is a Non-Control
Transaction;
(ii) a complete liquidation or dissolution of
the Company; or
(iii) an agreement for the sale or other
disposition of all or substantially all of the assets of
the Company to any Person.
1.7 "CONFIDENTIAL INFORMATION" means information that is
proprietary to the Company or proprietary to others and entrusted to the
Company, whether or not trade secrets. Confidential Information includes, but
is not limited to, information relating to business plans and to business as
conducted or anticipated to be conducted, and to past or current or
anticipated products. Confidential Information also includes, without
limitation, information concerning research, development, purchasing,
accounting, marketing, selling and services. All information that Executive
has a reasonable basis to consider confidential is Confidential Information,
whether or not originated by Executive and without regard to the manner in
which Executive obtains access to this and any other proprietary information.
1.8 "DATE OF TERMINATION" has the meaning set forth at
paragraph 4.6(b) of this Agreement.
1.9 "DISABILITY" means the unwillingness or inability of
Executive to perform Executive's duties under this Agreement because of
incapacity due to physical or mental illness, bodily injury or disease for a
period of six (6) months.
1.10 "GOOD REASON" has the meaning set forth at paragraph 4.3 of
this Agreement.
1.11 "INVENTIONS" means ideas, improvements and discoveries,
whether or not such are patentable or copyrightable, and whether or not in
writing or reduced to practice.
1.12 "NOTICE OF TERMINATION" has the meaning set forth at
paragraph 4.6(a) of this Agreement.
1.13 "PLAN" means any bonus or incentive compensation agreement,
plan, program, policy or arrangement sponsored, maintained or contributed to
by the Company, to which the Company is a party or under which employees of
the Company are covered, including, without limitation, any stock option,
restricted stock or any other equity-based compensation plan, annual or
long-term incentive (bonus) plan, and any employee benefit plan, such as a
thrift, pension, profit sharing, deferred compensation, medical, dental,
disability, accident, life insurance, automobile allowance, perquisite,
fringe benefit, vacation, sick or parental leave, severance or relocation
plan or policy or any other agreement, plan, program, policy or arrangement
intended to benefit employees or executive officers of the Company.
1.14 "SUCCESSOR" has the meaning set forth at paragraph 7.2 of
this Agreement.
1.15 "WORKS OF AUTHORSHIP" means writings, drawings, software,
semiconductor mask works, and any other works of authorship, whether or not
such are copyrightable.
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ARTICLE II. EMPLOYMENT, DUTIES AND TERM
2.1 EMPLOYMENT. Upon the terms and conditions set forth in this
Agreement, the Company hereby employs Executive, and Executive accepts such
employment, as President and Chief Executive Officer of the Company. Except
as expressly provided herein, termination of this Agreement by either party
or by mutual agreement of the parties shall also terminate Executive's
employment by the Company.
2.2 DUTIES. During the term of this Agreement, and excluding
any periods of vacation, sick, disability or other leave to which Executive
is entitled, Executive agrees to devote reasonable attention and time to the
business and affairs of the Company and to perform such duties as determined
from time to time by mutual agreement among Executive and the Board of
Directors of the Company and, to the extent necessary to discharge the
responsibilities assigned to Executive hereunder and under the Company's
By-Laws, as amended from time to time, to use Executive's reasonable best
efforts to perform faithfully and efficiently such responsibilities. During
the term of this Agreement, it shall not be a violation of this Agreement for
Executive to serve on corporate, civic or charitable boards or committees,
deliver lectures, fulfill speaking engagements or teach at educational
institutions and manage personal investments, so long as such activities do
not significantly interfere with the performance of Executive's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to the date of this
Agreement, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the date of
this Agreement shall not thereafter be deemed to interfere with the
performance of Executive's responsibilities to the Company. Executive shall
comply with the Company's policies and procedures; provided, that to the
extent such policies and procedures are inconsistent with this Agreement, the
provisions of this Agreement shall control.
2.3 CERTAIN PROPRIETARY INFORMATION. If Executive possesses any
proprietary information of another person or entity as a result of prior
employment or relationship, Executive shall honor any legal obligation that
Executive has with that person or entity with respect to such proprietary
information.
2.4 TERM. Subject to the provisions of Article IV, the term of
employment of Executive under this Agreement shall continue until December
31, 1999.
Commencing January 1, 2000 and each January 1 thereafter, the term of
Executive's employment hereunder shall be automatically extended for one (1)
additional year unless on or before the October 31 immediately preceding any
such January 1 either party gives written notice to the other of the cessation
of further extensions, in which case no further automatic extensions shall
occur.
2.5 RETURN OF PROPRIETARY PROPERTY. Executive agrees that all
property in Executive's possession belonging to Company, including without
limitation, all documents, reports, manuals, memoranda, computer print-outs,
customer lists, credit cards, keys, identification, products, access cards,
automobiles and all other property relating in any way to the business of the
Company are the exclusive property of the Company, even if Executive
authored, created or assisted in authoring or creating, such property.
Executive shall return to the Company all such documents and property
immediately upon termination of employment or at such earlier time as the
Company may reasonably request.
ARTICLE III. COMPENSATION, BENEFITS AND EXPENSES
3.1 BASE SALARY. Subject to paragraph 4.7(a), during the term
of Executive's employment under this Agreement and for as long thereafter as
required pursuant to Article IV, the Company shall pay Executive a Base
Salary at an annual rate that is not less than One Hundred Thousand and
00/100 Dollars ($100,000.00) or such higher annual rate as may from time to
time be approved by the Board, such Base Salary to be paid in substantially
equal regular periodic payments in accordance with the Company's regular
payroll practices. If Executive's Base Salary is increased from time to time
during the term of Executive's employment under this Agreement, the increased
amount shall become the Base Salary for the remainder of the term and any
extensions of Executive's term of employment under this Agreement and for as
long thereafter as required pursuant to Article IV, subject to any subsequent
increases. The Board of Directors of the Company shall review Executive's
Base Salary and all other compensation provided for by this Agreement on a
periodic basis (not longer than one year) and shall make such increases or
pay such bonuses as it determines to be appropriate in its sole discretion.
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3.2 OTHER COMPENSATION AND BENEFITS. During the term of
Executive's employment under this Agreement and for as long thereafter as
required pursuant to Article IV, the Company shall continue in full force and
effect all Plans in which Executive is participating as of the date of this
Agreement or in which Executive becomes entitled to participate after the
date of this Agreement (or Plans providing Executive with at least
substantially similar benefits) other than as a result of the normal
expiration of any such Plan in accordance with its terms as in effect as of
the date of this Agreement or the date as of which Executive first becomes
entitled to participate in such Plan, as the case may be, and shall not take
or omit to take any action that would adversely affect Executive's continued
participation in any such Plans on at least as favorable a basis to Executive
as is the case on the date of this Agreement or the date as of which
Executive first becomes entitled to participate in such Plan, as the case may
be, or which would materially reduce Executive's benefits in the future under
any such Plans or deprive Executive of any material benefit enjoyed by
Executive as of the date of this Agreement or the date as of which Executive
first becomes entitled to participate in such Plan, as the case may be.
Executive shall be entitled to participate in or receive benefits under any
Plan made available by the Company in the future to its executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such Plans. Nothing paid to
Executive under any Plan presently in effect or made available in the future
shall be deemed to be in lieu of the Base Salary, bonuses, incentives or
compensation of any other nature otherwise payable to Executive. The Company
shall also procure, for the benefit of Executive and his beneficiaries, a
term life insurance policy with a death benefit in the amount of $250,000,
which policy shall be maintained in full force and effect during the term of
this Agreement.
3.3 VACATION. For the 1997 calendar year and each subsequent
calendar year that begins during the term of Executive's employment under
this Agreement and for each calendar year thereafter as required pursuant to
Article IV of this Agreement, Executive shall be entitled to fifteen (15)
paid vacation days. The time or times at which such vacation days are to be
taken shall be reasonably determined by Executive consistent with Executive's
duties and obligations under this Agreement. Executive shall be entitled to
carry forward up to fifteen (15) unused vacation days per year in the
aggregate. Upon the execution of this Agreement, the Company shall also pay
Executive for twenty (20) currently unused vacation days at his compensation
rate in effect immediately prior to the date hereof.
3.4 BUSINESS EXPENSES. During the term of Executive's
employment under this Agreement and for as long thereafter as required
pursuant to Article IV, the Company shall, in accordance with, and to the
extent of, its uniform policies in effect from time to time, bear all
ordinary and necessary business expenses incurred by Executive in performing
Executive's duties as an executive officer of the Company, including, without
limitation, all travel and living expenses while away from home on business
in the service of the Company, home telephone expenses and entertainment
expenses, provided that Executive accounts promptly for such expenses to the
Company in the manner reasonably prescribed from time to time by the Company.
3.5 AUTOMOBILE. The Company shall pay, or at Executive's
election shall reimburse Executive for, all fees, taxes, costs and expenses
relating to leasing, licensing, insuring and maintaining an automobile for
the exclusive use by Executive and shall furnish gasoline in connection with
any use of such automobile by Executive for Company purposes. Executive shall
be responsible for all payments attributable to traffic violations relating
to Executive's use of such automobile (other than such payments, or the
portion thereof, covered by insurance on such automobile) and shall maintain
the automobile in saleable condition at all times. Executive shall also be
responsible for all costs of fuel related to his personal use of such
automobile as well as all income tax liabilities incurred in connection with
his personal use thereof.
3.6 OFFICE AND FACILITIES. During the term of Executive's
employment under this Agreement, the Company shall furnish Executive with
office space, at least equivalent in size, quality, furnishings and in other
respects to the office space provided as of the date of this Agreement, and
full-time secretarial service, together with such other reasonable facilities
and services as are suitable, necessary and appropriate.
3.7 GRANT OF OPTIONS. The Company shall grant to Executive
options to acquire 100,000 shares of the Company's common stock, no par value
per share. Such options shall be granted pursuant to the Company's 1992 Stock
Option Plan as evidenced by a grant agreement to be entered into between
Executive and the Company simultaneously with the execution of this Agreement.
ARTICLE IV. EARLY TERMINATION
4.1 EARLY TERMINATION. Subject to the respective continuing
obligations of the parties pursuant to Article V, this Article IV sets forth
the terms for early termination of Executive's employment under this
Agreement.
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4.2 TERMINATION BY THE COMPANY FOR CAUSE. The Company may
terminate this Agreement for Cause. For purposes of this Agreement, "Cause"
means (a) an act or acts of personal dishonesty taken by Executive and
intended to result in substantial personal enrichment of Executive at the
expense of the Company, (b) Executive's breach of any material covenant or
agreement contained in this Agreement, (c) intentional failure or refusal by
Executive to perform any of his duties and responsibilities hereunder, which
failure or refusal is not remedied within a reasonable period after
Executive's receipt of written notice of such failure or refusal from the
Company, or (d) the willful engaging by Executive in illegal conduct that is
materially and demonstrably injurious to the Company. For purposes of this
paragraph 4.2, no act, or failure to act, on Executive's part shall be
considered "dishonest," "willful" or "deliberate" unless done, or omitted to
be done, by Executive in bad faith and without reasonable belief that
Executive's action or omission was in, or not opposed to, the best interest
of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of
the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board (excluding
Executive for purposes of determining a majority) at a meeting of the Board
called and held for that purpose (after reasonable notice to Executive and an
opportunity for Executive, together with Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of the conduct set forth above in this paragraph 4.2 and
specifying the particulars thereof in detail.
4.3 TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may
terminate Executive's employment under this Agreement for Good Reason in
accordance with the ensuing provisions of this paragraph 4.3. Termination by
Executive for "Good Reason" shall mean termination of employment based on any
one or more of the following:
(a) An adverse change in Executive's status or
position as President and Chief Executive Officer of the Company,
including, without limitation, any adverse change in Executive's
status or position as a result of a material diminution in
Executive's duties, responsibilities or authority as of the date of
this Agreement or the assignment to Executive of any duties or
responsibilities which, in Executive's reasonable judgment, are
inconsistent with Executive's status or position, or any removal of
Executive from or any failure to reappoint or reelect Executive to
such positions (except in connection with the termination of
Executive's employment for Cause in accordance with paragraph 4.2
hereof or Disability or death in accordance with paragraph 4.4
hereof);
(b) A reduction by the Company in Executive's Base
Salary as in effect immediately prior to the date of this Agreement
or as the same may be increased from time to time or a change in the
eligibility requirements or performance criteria under any Plan
under which Executive is covered immediately prior to the date of
this Agreement, which adversely affects Executive;
(c) Without replacement by a Plan providing benefits
to Executive equal to or greater than those discontinued, the
failure by the Company to continue in effect, within its maximum
stated term, any Plan in which Executive is participating
immediately prior to the date of this Agreement or the taking of any
action by the Company that would adversely affect Executive's
participation or materially reduce Executive's benefits under any
Plan;
(d) The Company's requiring Executive to be based
anywhere other than the Minneapolis/St. ▇▇▇▇ metropolitan area,
except for required travel on the Company's business to an extent
substantially consistent with the business travel obligations which
Executive undertook on behalf of the Company prior to the date of
this Agreement;
(e) The failure by the Company to obtain from
any Successor an assent to this Agreement contemplated by
paragraph 7.2; or
(f) Any breach of this Agreement by the Company other
than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company within a
reasonable period after the Company's receipt of notice thereof from
the Executive.
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Notwithstanding any other provision of this Agreement to the contrary,
any termination by Executive of his employment for any reason during the sixty
(60) day period immediately following a Change-in-Control of the Company shall
be a termination for Good Reason.
4.4 TERMINATION IN THE EVENT OF DEATH OR DISABILITY. The term
of Executive's employment under this Agreement shall terminate in the event
of Executive's death or Disability.
4.5 TERMINATION BY MUTUAL AGREEMENT. The parties may terminate
Executive's employment under this Agreement at any time by mutual written
agreement.
4.6 NOTICE OF TERMINATION; DATE OF TERMINATION. The provisions
of this paragraph 4.6 shall apply in connection with any early termination of
Executive's employment under this Agreement pursuant to this Article IV.
(a) For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provisions in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide the basis for such termination. Any purported termination by
the Company or by Executive pursuant to this Article IV (other than
a termination by mutual agreement pursuant to paragraph 4.5 or
death) shall be communicated by written Notice of Termination to the
other party hereto.
(b) For purposes of this Agreement, "Date of
Termination" shall mean: (1) if Executive's employment is terminated
due to death, the last day of the month first following the month
during which Executive's death occurs; (2) if Executive's employment
is to be terminated for Disability, thirty (30) calendar days after
Notice of Termination is given; (3) if Executive's employment is
terminated by the Company for Cause or by Executive for Good Reason,
the date specified in the Notice of Termination; (4) if Executive's
employment is terminated by mutual agreement of the parties, the
date specified in such agreement; or (5) if Executive's employment
is terminated for any other reason, the date specified in the Notice
of Termination, which in no event shall be a date earlier than
ninety (90) calendar days after the date on which a Notice of
Termination is given, unless an earlier date has been expressly
agreed to by Executive in writing either in advance of, or after,
receiving such Notice of Termination; provided, however, if within
thirty (30) calendar days after giving of a Notice of Termination
the recipient of the Notice of Termination notifies the other party
that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally
determined, whether by mutual written agreement of the parties, by
final and binding arbitration or by final judgment, order or decree
of a court of competent jurisdiction (the time for appeal therefrom
having expired or no appeal having been perfected). During the
pendency of any such dispute and until the dispute is resolved in
the manner provided in the immediately preceding sentence, the
Company will continue to pay Executive all compensation and benefits
to which he was entitled pursuant to Article III immediately prior
to the time the Notice of Termination is given.
4.7 COMPENSATION UPON TERMINATION, DEATH OR DURING DISABILITY.
(a) During any period that Executive fails to perform
Executive's duties hereunder as a result of incapacity due to
physical or mental illness, bodily injury or disease, Executive
shall continue to receive all Base Salary and other compensation and
benefits to which Executive is otherwise entitled under this
Agreement and any Plan until Executive's Date of Termination.
(b) If Executive's employment under this Agreement is
terminated on account of Disability or death, the Company shall,
within ten (10) calendar days following the Date of Termination, pay
any amounts due to Executive for Base Salary through the Date of
Termination, together with any other unpaid and pro rata amounts to
which Executive is entitled as of the Date of Termination pursuant
to Article III hereof, including, without limitation, amounts which
Executive is entitled under any Plan in accordance with the terms of
such Plan, and further, including, without limitation, a pro rata
portion (prorated through the Date of Termination) of any annual or
long-term bonus or incentive payments (for performance periods in
effect at the Date of Termination) to which Executive would have
been entitled had Executive remained continuously employed through
the end of such performance periods and continued to perform
Executive's duties in the same manner as performed immediately prior
to the Executive's death or disability.
(c) If Executive's employment under this Agreement is
terminated by the Company for Cause or by Executive for other than
Good Reason, the Company shall pay Executive the Base Salary through
the Date of Termination and any amounts to which the Executive is
entitled under any Plan in accordance with the terms of such Plan.
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(d) If Executive's employment under this Agreement is
terminated by the mutual agreement of the parties under paragraph
4.5, the Company shall provide Executive with the payments and
benefits specified in the agreement.
(e) If, in breach of this Agreement, the Company
terminates Executive's employment hereunder (it being understood
that a purported termination for Disability or for Cause which is
disputed and finally determined not to have been proper shall be a
termination by the Company in breach of this Agreement) or if
Executive terminates his employment hereunder for Good Reason for
the unexpired term of this Agreement as determined in accordance
with paragraph 2.3, unless earlier terminated pursuant to paragraph
4.4 or paragraph 4.5, the Company shall, as liquidated damages for
such breach:
(1) continue to pay any amounts due to
Executive for Base Salary in accordance with paragraphs 3.1
at the annual rate in effect thereunder immediately prior
to the Date of Termination (but determined without regard
to any purported reduction in Base Salary which gave rise
to such termination of employment) in the same manner as if
Executive had remained continuously employed for the period
of one (1) year;
(2) cause Executive's continued participation
in all Plans in accordance with paragraph 3.2 of this
Agreement as if Executive remained continuously employed
with the Company throughout the period described in
paragraph 4.7(e)(1) for all purposes, including without
limitation grants, awards, accruals and vesting thereunder;
provided, that, if such continued participation is not
permissible under applicable law, the Company shall provide
Executive with benefits substantially similar to those to
which Executive would have been entitled under those Plans
in which Executive's continued participation is not
permissible; and
(3) continue to (i) provide Executive with
paid vacation in accordance with paragraph 3.3 of this
Agreement, (ii) bear business expenses of Executive in
accordance with paragraph 3.4 with respect to matters
reasonably undertaken by Executive on behalf of the
Company, and (iii) provide Executive with Automobile in
accordance with paragraph 3.5 of this Agreement, all in the
same manner as if Executive had remained continuously
employed throughout the period described in paragraph
4.7(e)(1);
without regard to whether any such compensation or benefits referred to
in clauses (1) through (3) of this subparagraph (e) constitute excess
parachute payments for purposes of Section 280G of the Internal Revenue
Code of 1986, as amended.
(f) The liquidated damages determined pursuant to
subparagraph (e) shall be mitigated to the extent of Executive's
"earned income" within the meaning of Section 911((d)(2)(A) of the
Internal Revenue Code of 1986, as amended, during the remainder of
the period with respect to which such liquidated damages are
required to be paid.
ARTICLE V. CONFIDENTIAL INFORMATION
5.1 PROHIBITIONS AGAINST USE. Executive will not during or
subsequent to the termination of Executive's employment under this Agreement
use or disclose, other than in connection with Executive's employment with
the Company, any Confidential Information to any person not employed by the
Company or not authorized by the Company to receive such Confidential
Information, without the prior written consent of the Company. Executive will
use reasonable and prudent care to safeguard, protect and prevent the
unauthorized use and disclosure of Confidential Information. The obligations
contained in this paragraph 5.1 will survive for as long as the Company in
its sole judgment considers the information to be Confidential Information.
The obligations under this paragraph 5.1 will not apply to any Confidential
Information that is now or becomes generally available to the public through
no fault of Executive or due to Executive's disclosure of any Confidential
Information required by law or judicial or administrative process.
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ARTICLE VI. NON-COMPETITION
6.1 NON-COMPETITION. Subject to paragraph 6.2 and 6.3, Executive
agrees that during the term of this Agreement and for a period of one (1)
year following termination of employment for any reason, Executive will not,
anywhere in the world, directly or indirectly, alone or as a partner,
officer, director, shareholder or employee of any other firm or entity,
engage in any commercial activity in competition with any part of the
Company's business as conducted during the term of the Agreement or as of the
date of such termination of employment or with any part of the Company's
contemplated business with respect to which Executive has Confidential
Information as governed by Article V. For purposes of this clause (a),
"shareholder" shall not include beneficial ownership of less than five
percent (5%) of the combined voting power of all issued and outstanding
voting securities of a publicly held corporation whose stock is traded on a
major stock exchange or quoted on NASDAQ.
6.2 EARLY TERMINATION. Notwithstanding paragraph 6.1, if
Executive's employment terminates under circumstances which entitle him to
receive liquidated damages for breach of this Agreement pursuant to paragraph
4.7(e) and the Company fails to provide Executive with any compensation or
benefits due him pursuant to paragraph 4.7(e) and does not remedy such
failure within ten (10) days after receipt of notice of such failure from
Executive, the restrictions set forth in paragraph 6.1 shall cease to apply
to Executive for the remainder of the period to which such restrictions would
otherwise apply notwithstanding any subsequent remedy of such failure by the
Company.
6.3 JUDICIAL MODIFICATION. If any of the foregoing covenants are
deemed by a court of competent jurisdiction to be unenforceable because of
their scope or duration, or the area or subject matter covered thereby, the
Company and Executive agree that the court making such determination shall
have the power to reduce or modify the scope, duration, subject matter and/or
area of such covenant to the extent that allows the maximum scope, duration,
subject matter and area permitted by applicable law.
6.4 COVENANT NOT TO RECRUIT. Executive recognizes that the
Company's workforce constitutes an important and vital aspect of its business
on a world-wide basis. Executive agrees that for a period of two (2) years
following the termination of this Agreement for any reason whatsoever, he
shall not solicit, or assist anyone else in the solicitation of, any of the
Company's then-current employees to terminate their employment with the
Company and to become employed by any business enterprise with which the
Executive may then be associated, affiliated or connected.
ARTICLE VII. GENERAL PROVISIONS
7.1 NO ADEQUATE REMEDY. Notwithstanding paragraph 4.7, the
parties declare that it is impossible to accurately measure in money the
damages which will accrue to either party by reason of a failure to perform
any of the obligations under this Agreement. Therefore, if either party shall
institute any action or proceeding to enforce the provisions hereof, other
than a claim by Executive for a payment pursuant to paragraph 4.7, the party
against whom such action or proceeding is brought hereby waives the claim or
defense that such party has an adequate remedy at law, and such party shall
not assert in any such action or proceeding the claim or defense that such
party has an adequate remedy at law.
7.2 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to
the benefit of any Successor of the Company, and any such Successor
shall absolutely and unconditionally assume all of the Company's
obligations hereunder. Upon Executive's written request, the Company
will seek to have any Successor, by agreement in form and substance
satisfactory to Executive, assent to the fulfillment by the Company
of its obligations under this Agreement. Failure to obtain such
assent at least three (3) business days prior to the time a person
or entity becomes a Successor (or where the Company does not have at
least three (3) business days' advance notice that a person or
entity may become a Successor, within one (1) business day after
having notice that such person or entity may become or has become a
Successor) shall constitute Good Reason for termination by Executive
of employment pursuant to paragraph 4.3. For purposes of this
Agreement, "Successor" shall mean any corporation, individual,
group, association, partnership, firm, venture or other entity or
person that, subsequent to the date hereof, succeeds to the actual
or practical ability to control (either immediately or with the
passage of time), all or substantially all of the Company's business
and/or assets, directly or indirectly, by merger, consolidation,
recapitalization, purchase, liquidation, redemption, assignment,
similar corporate transaction, operation of law or otherwise.
(b) This Agreement and all rights of Executive
hereunder shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs,
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distributees, devisees and legatees. If Executive should die while
any amounts would still be payable to Executive hereunder if
Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other designee or, if
there be no such designee, to Executive's estate. Executive may not
assign this Agreement, in whole or in any part, without the prior
written consent of the Company.
7.3 DISPUTES. Any dispute, controversy or claim for damages
arising under or in connection with this Agreement shall, in Executive's sole
discretion, be settled exclusively by such judicial remedies as Executive may
seek to pursue or by arbitration in Minneapolis, Minnesota by a panel of
three (3) arbitrators in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entitled on the
arbitrators' award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of Executive's right
to be paid until the Date of Termination during the pendency of any dispute
or controversy arising under or in connection with this Agreement. The
Company shall bear all costs and expenses, including attorney's fees, arising
in connection with any arbitration proceeding pursuant to this paragraph 7.3.
The Company shall be entitled to seek an injunction or restraining order in a
court of competent jurisdiction to enforce the provisions of Article V and VI.
7.4 NOTICES. All notices, requests and demands given to or made
pursuant hereto shall, except as otherwise specified herein, be in writing
and be personally delivered or mailed postage prepaid, registered or
certified U.S. mail, to any party at its address set forth on the last page
of this Agreement. Either party may, by notice hereunder, designate a changed
address. Any notice hereunder shall be deemed effectively given and received:
(a) if personally delivered, upon delivery; or (b) if mailed, on the
registered date or the date stamped on the certified mail receipt.
7.5 WITHHOLDING. To the extent required by any applicable law,
including, without limitation, any federal or state income tax or excise tax
law or laws, the Federal Insurance Contributions Act, the Federal
Unemployment Tax Act or any comparable federal, state or local laws, the
Company retains the right to withhold such portion of any amount or amounts
payable to Executive under this Agreement as the Company (on the written
advice of outside counsel) deems necessary.
7.6 CAPTIONS. The various headings or captions in this Agreement
are for convenience only and shall not affect the meaning or interpretation
of this Agreement.
7.7 GOVERNING LAW. The validity, interpretation, construction,
performance, enforcement and remedies of or relating to this Agreement, and
the rights and obligations of the parties hereunder, shall be governed by the
substantive laws of the State of Minnesota (without regard to the conflict of
laws rules or statutes of any jurisdiction), and any and every legal
proceeding arising out of or in connection with this Agreement shall be
brought in the appropriate courts of the State of Minnesota, each of the
parties hereby consenting to the exclusive jurisdiction of said courts for
this purpose.
7.8 CONSTRUCTION. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
7.9 WAIVERS. No failure on the part of either party to exercise,
and no delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right or remedy granted hereby or by any related
document or by law.
7.10 MODIFICATION. This Agreement may not be modified or amended
except by written instrument signed by the parties hereto.
7.11 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties hereto in reference to all
the matters herein agreed upon. This Agreement replaces in full all prior
employment agreements or understandings of the parties hereto, and any and
all such prior agreements or understandings are hereby rescinded by mutual
agreement.
7.12 COUNTERPARTS. This Agreement may be executed in one (1) or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
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7.13 SURVIVAL. The parties expressly acknowledge and agree that
the provisions of this Agreement which by their express or implied terms
extend beyond the termination of Executive's employment hereunder (including,
without limitation, the provisions of paragraph 4.7 (relating to
compensation)) or beyond the termination of this Agreement (including,
without limitation, the provisions of paragraph 5.1 (relating to confidential
information) and Article VI (relating to non-competition)), shall continue in
full force and effect notwithstanding Executive's termination of employment
hereunder or the termination of this Agreement, respectively.
7.14 ATTORNEYS' FEES. The Company shall reimburse Executive for
all reasonable attorneys' fees incurred by Executive in negotiating this
Agreement; provided, however, that such reimbursement obligation shall not
exceed $2,500.
IN WITNESS WHEREOF, the parties hereto have caused this Executive
Employment Agreement to be duly executed and delivered as of the day and year
first above written.
EXECUTIVE COMPANY
PHOTRAN CORPORATION
By
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▇▇▇▇ ▇. ▇▇▇▇ Its Chairman
Address: Address:
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---------------------------- ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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