EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and between
SRC VISION, Inc., an Oregon corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(the "Executive"), as of January 1, 1998.
I. RECITAL.
WHEREAS, the Company desires to employ the Executive as Chairman of the
Board.
NOW, THEREFORE, the Company and the Executive desire to set forth in this
Agreement the terms and conditions of the Executive's employment with the
Company.
II. EMPLOYMENT.
The Company hereby employs the Executive and the Executive hereby accepts
such employment, upon the terms and conditions hereinafter set forth, from
January 1, 1998 to and including December 31, 1999. This Agreement shall be
automatically renewed for one additional year for each year subsequent to 1999
unless the Executive or the Company gives notice to the other, in writing, at
least 30 days prior to the expiration of 1998 or, thereafter, 13 months prior to
the expiration of the Agreement, of its or his desire to terminate this
Agreement or modify its terms. The Company agrees that the Executive will be
located, and will render such services, in the Medford, Oregon area.
III. DUTIES.
A. The Executive shall serve during the course of his employment as
Chairman of the Board of the Company and shall have such other similar duties
and responsibilities as the Board of Directors of the Company shall determine
from time to time.
B. The Executive agrees to devote a portion of his time, energy and ability
to the business of the Company that he deems necessary.
C. For the term of this Agreement, the Executive shall report to the Board
of Directors of the Company.
IV. COMPENSATION.
A. Base Salary. The Company shall pay the Executive a Base Salary at a rate
to be determined by the Compensation Committee of the Board of Directors but
which rate shall not be less than the greater of
(i) $35,000 per year, or
(ii) if such rate is increased from time to time by the Compensation
Committee, such increased rate of Base Salary.
V. TERMINATION.
A. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that disability of the Executive has occurred (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the day of
receipt of such notice by the Executive. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his duties with the
Company on the basis provided in this agreement for a period of 3 months as a
result of Incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or his legal representative. "Incapacity" as used
herein shall be limited only to such Disability which substantially prevents
Company from availing itself of the services of the Executive.
B. Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, "Cause" shall mean that the Company, acting in
good faith based upon the information then known to the Company, determines that
the Executive has:
(i) committed an act of fraud upon, or an act evidencing material
dishonesty toward the Company; or
(ii) been convicted of a felony, which conviction through lapse of
time or otherwise is not subject to appeal; or
(iii) willfully refused to perform material required duties and
responsibilities or performed them with gross negligence or willful
misconduct and failed to cure such misconduct given the opportunity within
thirty days written notice by the Company to remedy such acts.
C. Obligations of the Company upon Termination Based upon Death or
Disability or Cause.
(i) Death or Disability. If the Executive's employment is terminated
by reason of the Executive's Death or Disability, this Agreement shall
terminate without further obligations to the Executive or his legal
representatives under this Agreement, other than for payments made by the
Company to the Executive equal to the sum of:
(a) the Executive's annual Base Salary through the date of
termination to the extent not theretofore paid, and
(b) reasonable Employment Expenses, as provided herein, through
the date of termination to the extent not theretofore paid.
The sum of the amounts described in clauses (a)and (b) shall be hereinafter
referred to as the "Accrued Obligations" which shall be paid to the Executive or
his estate or beneficiary, as applicable, in a lump sum in cash within 30 days
of the date of termination.
(ii) Cause. If the Executive's employment is terminated by the Company
for Cause, this Agreement shall terminate without further obligations to
the Executive other than for the timely payment of Accrued Obligations.
D. Obligations of the Company upon Termination without Cause. If the
Executive's employment is terminated by the Company other than for Cause as
described in Section V. B. above, the Company shall pay Executive the Accrued
Obligations and, in addition, shall pay the Executive an amount equal to 2.99
times the then current annual Base Salary in 24 equal monthly installments
unless such termination follows a "change of control" (as described in this
Section V. D. below), in which case the Company will immediately pay the
Executive such amount in a single cash lump sum payment. Termination without
cause shall also be deemed to occur upon "Constructive Termination" as described
below. Termination pursuant to Section V. A. (Death or Disability) shall not
constitute termination without cause under this Section V. D. In addition, the
Company shall pay to the Executive or his estate or beneficiary, as applicable,
Accrued Obligations.
Change in Control. For purposes of this Agreement, a change of control
shall mean:
(i) any transfer or series of transfers of capital stock of the
Company, other than as a result of a sale of capital stock of the Company
pursuant to a public offering registered under the Securities Act of 1933,
as amended, as a result of which the holders of capital stock of the
Company prior to such transfer or transfers become, collectively, the legal
or beneficial holders of less than fifty percent (50%) of the capital stock
of the Company;
(ii) the consummation of any merger or consolidation of the Company
with another corporation; provided, however, that no Change in Control
shall be deemed to have occurred if, immediately following such merger or
consolidation, legal or beneficial holders of capital stock of the Company
prior to such merger or consolidation shall own or control, directly or
indirectly, through one or more intermediaries, equity securities
representing the power to vote or direct the voting of more than fifty
percent (50%) of the voting power of all classes of equity securities
entitled to vote in the election of directors of the corporation resulting
from such merger or consolidation; or
(iii) any transfer of all or substantially all of the business and
assets of the Company to another corporation; provided, however, that no
Change in Control shall be deemed to have occurred if the legal or
beneficial holders of capital stock of the Company prior to such transfer
of control, retain directly or indirectly through one or more
intermediaries, the power to vote or direct the voting of more than fifty
percent (50%) of the voting power of all classes of equity securities
entitled to vote in the election of directors of such corporation to which
all or substantially all of the business and assets of the Company are
transferred.
For purposes of this Change in Control section only, the term "Company"
shall mean the Company or its parent, Advanced Machine Vision Corporation.
Constructive Termination. For purposes of this Agreement, constructive
termination shall occur if
(i) the Executive's place of employment or the Company's business
office is moved more than 50 miles from its present location,
(ii) there is a material downward change in the Executive's duties and
responsibilities, (iii) there is a downward change in the Executive's Base
Salary, or (iv) there is a change in the Executive's title and/or
responsibilities that is clearly a demotion.
E. Special Severance. Following the expiration or termination of this
Agreement by breach or passage or time, if the Executive's employment at any
time is terminated without cause, then the Company shall pay the Executive as
Special Severance compensation an amount equal to 2.99 times the then current
annual Base Salary, payable in 24 equal monthly installments, subject to Section
V. F. below. This Special Severance payment shall be reduced by standard
withholding and other authorized deductions.
F. Notwithstanding any other provision of this Agreement, the Executive
shall be entitled to, and the Company will be obligated to pay the Executive,
severance in an amount equal to the lesser of
(i) the amount prescribed by this Agreement, or
(ii) the maximum permitted under then current U. S. Federal Income Tax
Regulations as currently described in Section 280(g) of the Internal
Revenue Code without triggering a "parachute" excise tax for the Executive,
if applicable. The Executive and the Company shall determine in good faith
the maximum payment permitted under Federal Income Tax Regulations.
VI. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, shall be submitted
to arbitration, to be held in Medford, Oregon in accordance with the rules and
procedures of the American Arbitration Association. In the event either party
institutes arbitration under this Agreement, the costs and expenses of such
arbitration (including counsel fees) shall be borne by each of the parties, or
as the arbitrator(s) may determine at the request of either party.
VII. CONFIDENTIAL INFORMATION.
The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during his employment by the
Company or any of its affiliated companies and which shall not be or become
public knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's employment
with the Company, he shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
VIII. SUCCESSORS.
A. This Agreement is personal to the Executive and shall not, without the
prior written consent of the Company, be assignable by the Executive.
B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall include any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires the stock of the
Company or to which the Company assigns this Agreement by operation of law or
otherwise. Prior to assignment or succession of obligations to the Executive
under this Agreement, all remaining monetary obligations (including, but not
limited to, severance, benefits and applicable employer taxes) of the Company
will be placed in escrow by the Company for the sole purpose of paying such
obligations.
IX. WAIVER.
No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.
X. MODIFICATION.
This Agreement may not be amended or modified other than by a written
agreement executed by the Executive and the Company.
XI. SAVINGS CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
XII. COMPLETE AGREEMENT.
This instrument constitutes and contains the entire agreement and
understanding concerning the Executive's employment and the other subject
matters addressed herein between the parties, and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters hereof. This is an integrated document.
XIII. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered within
the State of Oregon, and the rights and obligations of the parties hereunder
shall be construed and enforced in accordance with, and governed by, the laws of
the State of Oregon without regard to principles of conflict of laws.
XIV. CONSTRUCTION.
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
XV. COMMUNICATIONS.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if mailed
by registered or certified mail, postage prepaid, addressed to the Executive at
the Executive's residence address on file with the Company, or addressed to the
Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Any party may change the
address at which notice shall be given by written notice given in the above
manner.
XVI. EXECUTION.
This Agreement is being executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.
XVII. LEGAL COUNSEL.
The Executive and the Company recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SRC VISION, INC. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. Steel /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its Chief Financial Officer
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