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Exhibit
10.1
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT ("Agreement") is by and between Patriot Scientific
Corporation, a Delaware corporation ("Employer" or the "Company") and Clifford
Flowers ("Executive").
In
consideration of the promises and mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
1. Employment.
Upon
the terms and
conditions hereinafter set forth, Employer hereby employs Executive to serve
as
the Chief Financial Officer of the Company ("CFO"), and Executive hereby accepts
such employment under the terms and conditions set forth herein.
2. Effective
Date. The
effective date of the Agreement shall be September 17, 2007 (the "Effective
Date"). The employment relationship pursuant to this Agreement shall be for
an
initial one hundred twenty (120) day period commencing on the Effective Date
set forth above ("Initial Term"), unless sooner terminated in accordance with Section 7 below.
On completion of the Initial Term specified above, and if not terminated
pursuant to Section 7 below, this Agreement will extend for a one year term
("One Year Term") and will be terminable by either party, with or without cause
as set forth in Sections 4 and 7 of this Agreement. If neither party has
terminated the Agreement within one year of the expiration of the Initial Term,
the employment relationship as set forth in this Agreement shall continue in
accordance with the terms of this Agreement on a day to day basis.
3. Duties.
Executive
shall perform such duties as are customarily performed by a Chief Financial
Officer, and such other duties and responsibilities that may be assigned to
him
by the Chief Executive Officer ("CEO") and/or the Board of Directors.
Specifically, Executive shall manage the Company's budget, business development,
financial affairs, and perform such duties and responsibilities as set forth
in
the CFO job description, a current copy of which is attached hereto as Exhibit
"B".
Executive
shall report to the President/CEO and Audit Committee and have such authority
as
is delegated by the President/CEO and Audit Committee. Executive shall be
governed by the policies and practices established by the Company. Employer
requires that: (1) Executive will devote his utmost knowledge and best skill
to
the performance of his duties; (ii) Executive shall devote his full business
time (not less than 40 hours per week) to the rendition of such services,
subject to absences for customary vacations and for temporary illness; and
(iii)
Executive will not engage in any other gainful occupation which requires his
personal attention and/or creates a conflict of interest with his job
responsibilities under this Agreement without the prior written consent of
the
Board of Directors of the Company, with the exception that Executive may
personally trade in stock, bonds, securities, commodities or real estate
investments for his own benefit to the extent permitted by the provisions herein
and applicable law.
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Executive's
job performance will be reviewed annually. Executive acknowledges and
understands that performance reviews do not necessitate or correlate with salary
increases and that a favorable performance review neither guarantees continued
employment nor increased compensation.
4. At-Will
Employment. . Executive and Employer agree that
Executive's employment may be terminated by Executive or by Employer, with
or
without cause any time prior to the expiration of the Initial Term and/or the
One Year Term and any time after the One Year Term in accordance with paragraph
7 of this Agreement. Executive and Employer expressly agree that this provision
is intended by Executive and Employer to be the complete and final expression
of
their understanding regarding the terms and conditions under which Executive's
employment may be terminated. Executive and Employer further understand and
agree that no representation contrary to this provision is valid, and that
this
provision may not be augmented, contradicted or modified in any way, except
in
writing signed by Executive, the President/CEO and the Chairperson of the
Auditing Committee.
5. Compensation.
5.1 Base
Salary.
Executive shall be paid an annual base salary of Two Hundred Twenty-Five
Thousand Dollars ($225,000), payable according to Employer's payroll schedule
and subject to applicable state and federal withholdings and other payroll
deductions.
5.2 Bonus.
In
addition
to Executive's base salary, Executive shall be eligible to receive an additional
annual discretionary bonus of up to fifty percent (50%) of his then in effect
base salary, as determined by the CEO and Board of Directors/Compensation
Committee in their sole discretion. Executive acknowledges that although a
discretionary bonus may be provided by the Company, any such bonus is neither
required nor guaranteed by this Agreement.
5.3 Stock
Options.
Employer agrees to provide stock options to Executive as follows
(collectively, the "Options"):
(i) The
Company shall provide Executive with a non-qualified stock option
for exercise into One Hundred Fifty Thousand (150,000) shares of the Company's
common stock effective as of the Effective Date (the "Signing Bonus Option").
The grant price of the Signing Bonus Option shall be the closing sales price
of
the Company's common stock on September 17, 2007 as quoted on the OTC Bulletin
Board, or if there is no closing sales price on that date, the closing selling
price on the last preceding date for which such quotation exists. 100% of the
shares subject to the Signing Bonus Option will vest immediately upon the
expiration of the Initial Term, provided that Executive is still employed by
the
Company at such time.
(ii) Effective
as of the Effective Date, the Company shall provide Executive
with a non-qualified stock option for exercise into Six Hundred Thousand
(600,000) shares of the Company's common stock, with a grant price equal to
the
closing sales price of the Company's common stock on September 17, 2007 as
quoted on the OTC Bulletin Board, or if there is no closing sales price on
that
date, the closing selling price on the last preceding date for which such
quotation exists, to vest as follows: (i) regular vesting to commence after
twelve
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(12)
months employment at 1/48th
over a period of four (4) years; and (ii) automatic accelerated vesting to
occur
for a percentage of unvested options, which amount shall be determined by the
CEO and the Board of Directors, but in no event, less than twenty-five percent
(25%), upon the "effective date" of a major event which shall include an
acquisition of the Company or merger or the listing of the Company on the Amex
or NASDAQ stock exchanges. Any remaining unvested options, if any, will vest
according to the regular vesting schedule set forth above in this Section 5.3
(ii).
(iii) The
options referenced above will be granted pursuant to, and will be subject to
the
terms of the Company's Stock Option Plan.
6. Fringe
Benefits.
6.1 Benefits.
Executive shall, in accordance with Company policy and the terms
of
the applicable plan documents, be eligible to participate in benefits under
any
Company benefit plan or arrangement which may be in effect from time to time
and
made available to its management employees. Such benefits currently include:
health insurance, which is a PPO plan with the Company paying 90% of employee
cost and 50% of dependent cost; life insurance with disability coverage, 401K
plan with Employer matching up to 6% of employee's annual salary, with 3 year
vesting on Employer match. 401K vesting to accelerate in the case of a Change
of
Control in accordance with the terms of the applicable plan.
6.2 Vacation.
Upon the expiration of the Initial Term, Executive shall begin to
earn
and accrue vacation days at the rate of fifteen (15) days per year. Unused
vacation shall carry over to the next year, but Executive shall cease accruing
further vacation at any time Executive has accrued twenty-three (23) vacation
days, and shall not accrue further vacation days until Executive has used some
or all of the accrued vacation days. Unused vacation days which are not in
excess of twenty-three (23) vacation days shall be paid in a cash lump sum
payment promptly after Executive's termination of employment. Executive shall
earn vacation days at the rate of twenty (20) days per year after five (5)
years
of employment.
6.3 Expenses.
Employer shall reimburse Executive on a monthly basis for receipts Executive
submits for all reasonable and necessary travel and other business expenses
incurred by Executive in the performance of Executive's duties hereunder,
consistent with Employer's normal expense reimbursement policy. Such expenses
shall include professional society membership dues. Additionally, Employer
will
reimburse Executive up to a maximum of One Thousand Five Hundred Dollars
($1,500) per year for successful completion (with a passing grade) of
job-related continuing education courses.
7. Termination.
7.1 Termination
With Cause. If Executive (a) breaches in any material respect or fails
to fulfill any fiduciary duty owed to Employer; (b) breaches in any material
respect this Agreement or any other confidentiality or non-solicitation,
non-competition agreement between Employer and Executive; (c) pleads guilty
to
or is convicted of a felony, a crime of moral turpitude or any other crime;
(d)
is found to have engaged in any reckless, fraudulent, dishonest or grossly
negligent misconduct, or act of moral turpitude, (e) fails to satisfactorily
perform his
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duties
to
the Company or comply with Company policies and rules (excluding those policies
set forth in paragraph 7.1(f) for which no opportunity to cure is requires),
provided that Executive fails to cure any such failure within thirty (30) days
after written notice from Employer of such failure, provided further, however,
that such right to cure shall not apply to any repetition of the same failure
previously cured hereunder; or (f) violates any material rule, regulation or
policy of the Company relating to harassment, discrimination, retaliation,
violence, theft/embezzlement, business ethics, and drug and alcohol use, that
may be established and made known to Employer's employees from time to time,
including without limitation, the Company Employee Handbook, a copy of which
has
been provided to Executive, Employer may terminate immediately his employment
and Executive shall have no right to receive any compensation or benefit
hereunder after such termination other than base salary and vacation earned
or
accrued but unpaid as of the date of termination. Executive shall not be
entitled to any bonus, or proration thereof, if terminated under this
paragraph.
7.2 Termination
Without Cause. As stated in Section 4 of this Agreement, Executive or
the Company may at any time terminate Executive's employment with or without
cause. If the Company terminates Executive's employment within two years of
the
Effective Date and such termination is not a Termination With Cause as defined
above, the Company shall continue to pay Executive's base salary then in effect
as of the date of such termination on a prorated basis according to
Employer's payroll schedule and subject to applicable withholdings for a period
of six (6) months or the remainder of the one-year time period from the
Effective Date, whichever time period is greater (and if the Company, terminates
Executive's employment any time after two (2) years of continuous employment
without Cause as defined above, the Company shall continue to pay Executive's
base salary for twelve (12) months) (collectively "Severance"), provided only
if
Executive signs a general release. Such Severance does not include the
continuation of the benefits allowance after termination or the proration of
any
bonus. At the Company's sole option, any Severance to which Executive is
entitled may be paid in a lump sum less applicable withholdings in lieu of
payment made over time in accordance with Employer's payroll
schedule.
In
order
to be entitled to the Severance reflected herein, Executive must sign a general
release of all claims known and unknown, against Employer, its officers and
directors, agents and employees and any related entities or persons. Although
a
copy of the Company's current standard general release shall be available for
Executive's review upon his request, Executive acknowledges that such release
is
subject to change at the Company's discretion. Nothing herein will be construed
to limit or modify the duty of Executive to mitigate Executive's damages in
the
event Employer terminates Executive's employment without Cause.
7.3 Termination
Upon
Death or Disability. Executive's employment shall terminate upon his
death or disability ("disability" being defined as any mental or physical
condition which, in the reasonable opinion of a mutually agreed upon licensed
physician and/or psychiatrist (as the case may be), renders Executive unable
or
incompetent to carry out Executive's duties under this Agreement, with or
without reasonable accommodation, for a period of at least three months). In
the
event of a termination of Executive's employment for death or disability,
Executive shall have no right to receive any further compensation or benefit
hereunder after such termination other than base salary and vacation earned
or
accrued but unpaid as of the date of termination.
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7.4 Change
of Control.
In the event of any merger, acquisition .or consolidation of the
Company where
the Company is not the surviving or resulting corporation, or upon transfer
of
all or substantially all of the assets of the Company, and Employee is not
retained by the surviving or resulting corporation in a substantially similar
position or position satisfactory to Employee ("Change of Control"), Employee
shall be paid a lump sum equivalent to six (6) months of Employee's base salary
then in effect (or twelve (12) months if such Change of Control occurs after
two
continuous years of employment) upon the execution of a general release. Such
lump sum payment shall be considered to be in full and complete satisfaction
of
any and all rights which Employee may enjoy under the terms of this Agreement,
except that any and all of Executive's unvested stock options shall become
fully
vested and exercisable.
7.5 Resignation
For Good
Reason. In the event Executive resigns his employment and such
resignation is with "Good Reason" as defined below, Executive will be entitled
to receive Severance in accordance with the terms set forth in paragraph 7.2
above, provided Executive complies with the conditions in paragraph 7.2 above.
In the event Executive resigns without Good Reason, Executive will not be
entitled to receive the Severance described in paragraph 7.2 above. Executive
will be deemed to have resigned with "Good Reason" upon the occurrence of any
of
the following events without Executive's consent: (i) a material reduction
in
Executive's duties, authority, or responsibilities relative to the duties,
authority, or responsibilities in effect immediately prior to such reduction;
(ii) the relocation of Executive's principal place of business to a point more
than sixty (60) miles from Carlsbad, California; or (iii) a material reduction
by the Company of Executive's base salary as initially set forth herein or
as
the same may be increased from time to time. Provided however
that, such termination by Executive shall only be deemed
for Good Reason pursuant to the foregoing definition if: (i) Executive gives
the
Company written notice of the intent to terminate for Good Reason within thirty
(30) days following the first occurrence of the condition(s) that Executive
believes constitutes Good Reason, which notice shall describe such condition(s);
(ii) the Company fails to remedy such condition(s) within thirty (30) days
following receipt of the written notice (the "Cure Period"); and (iii) Executive
terminates his employment within thirty (30) days following the end of the
Cure
Period.
7.6 280G
Limitation on Payments.
(i) In
the event
that the severance and other benefits provided for in this Agreement or
otherwise payable to the Executive (i) constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) but for this Section 7.6 would be subject to the excise
tax imposed by Section 4999 of the Code, then the Executive's severance and
other benefits provided under this Agreement shall be payable either (i) in
full, or (ii) as to such lesser amount which would result in no portion of
such
benefits being subject to excise tax under Section 4999 of the Code, whichever
of the foregoing amounts, taking into account the applicable federal, state
and
local income taxes and the excise tax imposed by Section 4999, results in the
receipt by the Executive on an after-tax basis, of the greatest amount of
benefits under this Agreement, notwithstanding that all or some portion of
such
benefits may be taxable under Section 4999 of the Code.
(ii) If
a
reduction in the payments and benefits that would otherwise be paid or provided
to the Executive under the terms of this Agreement is necessary to comply
with
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the
provisions of Section 7.6(i), the Executive shall be entitled to select which
payments or benefits will be reduced and the manner and method of any such
reduction of such payments or benefits (including but not limited to the number
of options that would vest under Sections 5.3 or 7.4) subject to reasonable
limitations (including, for example, express provisions under the Company's
benefit plans) so long as the requirements of Section 7.6(i) are met. Within
thirty (30) days after the amount of any required reduction in payments and
benefits is finally determined in accordance with the provisions of Section
7.6(iii), the Executive shall notify the Company in writing regarding which
payments or benefits are to be reduced. If no notification is given by the
Executive, the Company will determine which amounts to reduce. If, as a result
of any reduction required by Section 7.6(i), amounts previously paid to the
Executive exceed the amount to which the Executive is entitled, the Executive
will promptly return the excess amount to the Company.
(iii) Any
determination required under this Section 7.6(iii) shall be made
in
writing by a nationally recognized accounting or consulting firm appointed
by
the Company, which firm shall not then be serving as accountant or auditor
for
or consultant to the Company or the person or entity that effected the Change
in
Control and whose determinations shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 7.6, such firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to such
firm such information and documents as such firm may reasonably request in
order
to make a determination under this Section 7.6. The Company shall bear all
costs
such firm may reasonably incur in connection with any calculations contemplated
by this Section 7.6.
7.7 Application
of
Internal Revenue Code Section 409A. Severance payable under Sections
7.2 and 7.5 of this Agreement are intended to be payable pursuant to the "short-
term deferral" rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations. Severance payable pursuant to Section 7.4 of this Agreement are
intended to be payable pursuant to a window program pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations to the maximum extent permitted
by said provision, with any excess amount being regarded as subject to the
distribution requirements of Section 409A(a)(2)(A) of the Code, including,
without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code
that
payment to Executive be delayed until 6 months after Executive's separation
from
service if Executive is a "specified employee' within the meaning of the
aforesaid section of the Code at the time of such separation from
service
8. Trade
Secrets, Confidential Information and Inventions.
8.1 Trade
Secrets In General. During the course of Executive's employment, Executive
will have access to various trade secrets, confidential information and
inventions of Employer as defined below.
(i) "Confidential
Information" means all information and material which is proprietary to the
Company, whether or not marked as "confidential" or "proprietary" and which
is
disclosed to or obtained from the Company by the Executive, which relates to
the
Company'
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past,
present or future research, development or business activities. Confidential
Information is all information or materials prepared by or for the Company
and
includes, without limitation, all of the following: designs, drawings,
specifications, techniques, models, data, source code, object code,
documentation, diagrams, flow charts, research, development, processes, systems,
methods, machinery, procedures, "know-how", new product or new technology
information, formulas, patents, patent applications, product prototypes, product
copies, cost of production, manufacturing, developing or marketing techniques
and materials, cost of production, development or marketing time tables,
customer lists, strategies related to customers, suppliers or personnel,
contract forms, pricing policies and financial information, volumes of sales,
and other information of similar nature, whether or not reduced to writing
or
other tangible form, and any other Trade Secrets, as defined by subparagraph
(iii), or non-public business information. Confidential Information does not
include any information which (1) was in the lawful and unrestricted possession
of the Executive prior to its disclosure by the Company, (2) is or becomes
generally available to the public by acts other than those of the Executive
after receiving it, or (3) has been received lawfully and in good faith by
the
Executive from a third party who did not derive it from the
Company.
(ii) "Inventions"
means all discoveries, concepts and ideas, whether patentable or not, including
but not limited to, processes, methods, formulas, compositions, techniques,
articles and machines, as well as improvements thereof or "know-how" related
thereto, relating at the time of conception or reduction to practice to the
business engaged in by the Company, or any actual or anticipated research or
development by the Company.
(iii) "Trade
Secrets" shall mean any scientific or technical data, information, design,
process, procedure, formula or improvement that is commercially available to
the
Company and is not generally known in the industry.
This
section includes not only information belonging to Employer which existed before
the date of this Agreement, but also information developed by Executive for
Employer or its employees during his employment and thereafter.
8.2 Restriction
on Use of Confidential Information. Executive agrees that his use of
Trade Secrets and other Confidential Information is subject to the following
restrictions during the term of the Agreement and for an indefinite period
thereafter so long as the Trade Secrets and other Confidential Information
have
not become generally known to the public.
8.2.1 Non-Disclosure.
Except as required by the performance of the Executive's services to the Company
under the terms of this Agreement, neither the Executive nor any of his agents
or representatives, shall, directly or indirectly, publish or otherwise
disclose, or permit others to publish, divulge, disseminate, copy or otherwise
disclose the Company's Trade Secrets, Confidential Information and/or Inventions
as defined above.
8.2.2 Use
Restriction. Executive shall use the Trade Secrets, other Confidential
Information and/or Inventions only for the limited purpose for which they were
disclosed. Executive shall not disclose the Trade Secrets, other Confidential
Information and/or Inventions to any third party without first obtaining written
consent from the CEO and shall disclose the Trade Secrets, other Confidential
Information and/or Inventions only to Employer's
7
own
employees having a need know. Executive shall promptly notify the CEO of any
items of Trade Secrets prematurely disclosed.
8.2.3 Surrender
Upon Termination. Upon termination of his employment with Employer for
any reason, Executive will surrender and return to Employer all documents and
materials in his possession or control which contain Trade Secrets, Inventions
and other Confidential Information. Executive shall immediately return to the
Company all lists, books, records, materials and documents, together with all
copies thereof, and all other Company property in his possession or under his
control, relating to or used in connection with the past, present or anticipated
business of the Company, or any affiliate or subsidiary thereof. Executive
acknowledges and agrees that all such lists, books, records, materials and
documents, are the sole and exclusive property of the Company.
8.2.4 Prohibition
Against Unfair Competition. At any time after the termination of his
employment with Employer for any reason, Executive will not engage in
competition with Employer while making use of the Trade Secrets of
Employer.
8.2.5 Patents
and Inventions. The Executive agrees that any inventions made,
conceived or completed by him during the term of his service, solely or jointly
with others, which are made with the Company's equipment, supplies, facilities
or Confidential Information, or which relate at the time of conception or
reduction to purpose of the invention to the business of the Company or the
Company's actual or demonstrably anticipated research and development, or which
result from any work performed by the Executive for the Company, shall be the
sole and exclusive property of the Company. The Executive promises to assign
such inventions to the Company. The Executive also agrees that the Company
shall
have the right to keep such inventions as trade secrets, if the Company chooses.
The Executive agrees to assign to the Company the Executive's rights in any
other inventions where the Company is required to grant those rights to the
United States government or any agency thereof. In order to permit the Company
to claim rights to which it may be entitled, the Executive agrees to disclose
to
the Company in confidence all inventions which the Executive makes arising
out
of the Executive's service and all patent applications filed by the Executive
within one year after the termination of his service.
The
Executive shall assist the Company in obtaining patents on all inventions,
designs, improvements and discoveries patentable by the Company in the United
States and in all foreign countries, and shall execute all documents and do
all
things necessary to obtain letters patent, to vest the Company with full and
extensive title thereto, and to protect the same against infringement by
others.
9. Solicitation
of Employees or Customers.
9.1 Information
About
Other Employees. Executive will be called upon to work closely with
employees of Employer in performing services under this Agreement. All
information about such employees which becomes known to Executive during the
course of his employment with Employer, and which is not otherwise known to
the
public, including compensation or commission structure, is a Trade Secret of
Employer and shall not be used by
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Executive
in soliciting employees of Employer at any time during or after termination
of
his employment with Employer.
9.2 Solicitation
of
Employees Prohibited. During Executive's employment and for one year
following the termination of Executive's employment, Executive shall not,
directly or indirectly ask, solicit or encourage any employee(s) of Employer
to
leave their employment with Employer. Executive further agrees that he shall
make any subsequent employer aware of this non-solicitation
obligation.
9.3 Solicitation
of
Customers Prohibited. For a period of one year following the
termination of Executive's employment, Executive shall not, directly or
indirectly solicit the business of any of Employer's customers in any way
competitive with the business or demonstrably anticipated business of the
Company. Executive further agrees that he shall make any subsequent employer
aware of this non-solicitation obligation.
10. Non-Competition.
During the course of Executive's employment with the Company, Executive shall
not directly or indirectly own any interest in (other than owning less than
5%
of a publicly held company), manage, control, participate in (whether as an
officer, director, employee, partner, agent, representative, volunteer or
otherwise), consult with, render services for or in any manner engage (whether
or not during business hours) anywhere in the Restricted Territories (as defined
below) in any business activity that is in any way competitive with the business
or demonstrably anticipated business of the Company, Further, Executive will
not
during the course of his employment with the Company assist any other person
or
organization in competing or in preparing to compete with any business or
demonstrably anticipated business of the Company anywhere in the Restricted
Territories.
"Restricted
Territories" shall mean any county in the State of California or any other
state
or territory in the United States or any other similar political subdivision
in
any state or foreign country in which the Company has done business or has
actually investigated doing business or where its products are sold or
distributed whether or not for compensation.
11. Unfair
Competition, Misappropriation of Trade Secrets and Violation of
Solicitation/Noncompetition Clauses. Executive acknowledges that
unfair competition, misappropriation of trade secrets or violation of any of
the
provisions contained in paragraphs 8 through 10 would cause irreparable injury
to Employer, that the remedy at law for any violation or threatened violation
thereof would be inadequate, and that Employer shall be entitled to temporary
and permanent injunctive or other equitable relief without the necessity of
proving actual damages.
12. Representation
Concerning Prior Agreements. Executive represents to Employer that he
is not bound by any non-competition and/or non-solicitation agreement that
would
preclude, limit or in any manner affect his employment with Employer. Executive
further represents that he can fully perform the duties of his employment
without violating any obligations he may have to any former employer, including
but not limited to, misappropriating any proprietary information acquired from
a
prior employer. Executive agrees that he will indemnify and hold Employer
harmless from any and all liability and damage, including attorneys' fees and
costs, resulting from any breach of this provision.
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13. Personnel
Policies and Procedures. The Employer shall have the authority to
establish from time to time personnel policies and procedures to be followed
by
its employees. Executive agrees to comply with the policies and procedures
of
the Employer. To the extent any provisions in Employer's personnel policies
and
procedures differ with the terms of this Agreement, the terms of this Agreement
shall apply.
14. Amendments.
No amendment or modification of the terms or conditions of this Agreement shall
be valid unless in writing and signed by the parties hereto.
15. Successors
and Assigns. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. Executive shall not be entitled to assign any of his
rights or obligations under this Agreement.
16. Governing
Law. This Agreement shall be interpreted, construed, governed and
enforced in accordance with the laws of the State of California.
17. Severability.
Each term, condition, covenant or provision of this Agreement shall be viewed
as
separate and distinct, and in the event that any such term, covenant or
provision shall be held by a court of competent jurisdiction to be invalid,
the
remaining provisions shall continue in full force and effect.
18. Survival.
The provisions in paragraphs 8 through 11, 14 through 23, inclusive, of this
Agreement shall survive termination of Executive's employment, regardless of
who
causes the termination and under what circumstances.
19. Waiver.
Neither party's failure to enforce any provision or provisions of this Agreement
shall be deemed or in any way construed as a waiver of any such provision or
provisions, nor prevent that party thereafter from enforcing each and every
provision of this Agreement. A waiver by either party of a breach of provision
or provisions of this Agreement shall not constitute a general waiver, or
prejudice the other party's right otherwise to demand strict compliance with
that provision or any other provisions in this Agreement.
20. Notices.
Any notice required or permitted to be given under this Agreement shall be
sufficient, if in writing, sent by mail to Executive's residence in the case
of
Executive, or hand delivered to the Executive, and, in the case of Employer,
to
the Board of Directors at the principal corporate office.
21. Arbitration.
The parties agree that disputes concerning the terms of this Agreement and
Executive's employment under this Agreement are subject to arbitration in
accordance with the Employee Arbitration Agreement attached hereto as Exhibit
"A" and incorporated by this reference as though fully set forth
herein.
22. Entire
Agreement. Executive acknowledges receipt of this Agreement and agrees
that this Agreement represents the entire agreement with Employer concerning
the
subject matter hereof, and supersedes any previous oral or written
communications, representations, understandings or agreements with Employer
or
any officer or agent thereof through the date the Agreement is executed by
the
parties, except the Employee Arbitration Agreement which is
10
