Exhibit 10.3
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made as of this 9th day
of
September 2005, by and between AIMSI
Technologies, Inc., a Utah corporation (the
"Company"), and Edward J. Lapsa
("Employee").
WITNESSETH:
WHEREAS, the Company and Employee are parties to that certain
letter
agreement, dated April 20, 2005 (the
"Letter Agreement"), pursuant to which
Employee accepted the Company's offer to
serve as the President and Chief
Executive Officer of the Company and its
subsidiaries on an interim basis;
WHEREAS, paragraph 4 of the Letter Agreement provides that the
Company
shall cooperate with Employee to enter into
an agreement under which the Company
would compensate Employee for a period of
time following the termination of
Employee's employment for reasons other
than for cause or Employee's voluntary
termination; and
WHEREAS, pursuant to paragraph 4 of the Letter Agreement, the
Company
and Employee desire to set forth certain
arrangements in the event of Employee's
separation from the Company.
NOW, THEREFORE, in consideration of the facts, mutual promises,
and
covenants contained herein and intending to
be legally bound hereby, the parties
hereto agree as follows:
1. Severance.
(a) Salary. If at any time following the date hereof
Employee's employment with the Company as
interim President and Chief Executive
Officer is terminated (i) by the Company
without "Cause" (as defined below), or
(ii) by Employee for "Good Reason" (as
defined below), Employee's base annual
salary of $168,000 shall continue as
severance payments until, and terminate
upon, the six (6) month anniversary of the
effective date of such termination.
Such severance payments shall be payable
during the six-month severance period
in accordance with the Company's regular
payroll practices as currently in
effect and shall be subject to such
withholding as may be required by applicable
law.
(b) Benefits. Upon termination of Employee's employment (i) by
the Company without Cause or (ii) by
Employee for Good Reason, Employee shall,
in addition to receiving his base salary as
severance payments in accordance
with Section 1(a) above, retain all of his
benefits until the six (6) month
anniversary of the date of his
termination.
Upon termination of Employee's employment with the Company,
whether for Cause or otherwise, Employee
shall be entitled to any earned and
unpaid benefits (other than base salary) up
to the date of termination,
provided, however, that the Company may set
off any amounts owed by Employee to
the Company, its subsidiaries or its
affiliates (including but not limited to
any unearned salary advances or outstanding
loans) against any payments due
Employee hereunder (whether for severance
or otherwise).
(c) For purposes of this Agreement, the term "Cause" shall
mean the following: (i) if Employee is in
material violation or breach of the
terms of this Agreement or neglects or
refuses to perform his employment duties
reasonably assigned to him by the Board of
Directors of the Company or fails to
attempt in good faith to follow any
material express written direction of any
lawful rule or regulation established by
the Company or its Board of Directors
which is consistent with the scope of
Employee's employment duties and such
neglect, refusal, violation or breach
continues uncured for thirty (30) days
following receipt by Employee of written
notice of such breach (specifying in
reasonable detail the basis therefore and
stating that it is grounds for Cause);
provided, however, the Employee shall be
permitted to respond and to defend
himself before the Board of Directors or
any appropriate committee thereof
within a reasonable period of time
following written notification of any
proposed termination; provided, further,
that the cure provision contained in
this Section 1(c)(i) shall not apply to any
breaches of the covenants contained
in Section 2 hereof; or (ii) if Employee
commits fraud or theft against the
Company and/or its subsidiaries or
affiliates or is convicted of a felony
offense or any crime involving moral
turpitude.
For purposes of this Agreement, termination by
Employee of his employment with the
Company for "Good Reason" shall mean
termination based on any of the following:
(i) a reduction by the Company in
Employee's salary, compensation or benefits as
set forth in Section 1 hereof; (ii) a
demotion in Employee's position with the
Company from the position referenced in
Section 1 hereof, except in the event
that Employee is restored to his position
as Vice President of Research and
Development, in which he served prior to
April 20, 2005; (iii) a material breach
by the Company of the terms of this
Agreement that continues uncured for thirty
(30) days following receipt by the Company
of written notice of such breach;
(iv) the Company's requiring Employee to be
based more than 100 miles from the
Company's principal office in Oak Ridge,
Tennessee; (v) the failure by the
Company to obtain an agreement from any
successor (whether by merger, the
purchase of all or substantially all of the
Company's assets, or otherwise) to
assume and agree to perform this Agreement;
or (vi) the termination by the
University of Alabama in Huntsville or
Georgia Tech Applied Research Corporation
of the intellectual property and other
rights granted to the Company, its
subsidiaries or affiliates, pursuant to the
Executive License Agreement dated
September 1, 2004, or the Cost
Reimbursement Research Project Agreement
effective August 1, 2004, respectively, if
such rights are, at the time of the
termination, essential for the conduct of
the Business as it is then-presently
conducted, and if such termination directly
results in the insolvency,
bankruptcy and/or dissolution of the
Company within thirty (30) days after the
termination.
(d) The Company shall have the right to terminate Employee's
employment without the payment of severance
or benefits (i) in the event of
Employee's death or (ii) if, due to any
physical or mental illness, disability
or incapacity, Employee is prevented from
performing the essential functions of
his employment duties for a period of not
less than ninety (90) consecutive days
or for an aggregate of one hundred fifty
(150) days during any period of twelve
(12) consecutive months, even with
reasonable accommodations.
(e) Recognition. Employee recognizes and accepts that (i)
Employee is employed by the Company on an
"at will" basis, (ii) this Agreement
does not guarantee or otherwise provide for
employment and that, at any time and
for any reason, Employee may resign or the
Company may terminate Employee's
employment with the Company, and (iii) the
Company shall not, in any case, be
responsible for any additional amount,
severance pay, termination pay, severance
obligation or other damages whatsoever
arising from the termination of his
employment, above and beyond those
specifically provided for in this Agreement.
(f) Effectiveness of Agreement. In order for this Agreement to
become effecti
