As filed with the Securities and Exchange Commission on December 27, 1996
File No. 2-93124
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=============
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SGI INTERNATIONAL
(Exact Name of Registrant as Specified in its Charter)
=====================
Utah 33-0119035
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
1200 Prospect Street, Suite 325 92037
La Jolla, California (Zip Code)
(Address of Registrant's Principal Executive Office)
Standard Employment Agreements dated as of October 31, 1995,
January 1, 1996, February 26, 1996, March 4, 1996, March 6, 1996,
March 18, 1996, May 23, 1996, May 28, 1996, June 4, 1996, July 1, 1996,
July 18, 1996, July 22, 1996, July 29, 1996, August 1, 1996,
September 30, 1996, October 14, 1996, November 12, 1996, December 2, 1996,
Non-Standard Employment Agreements dated as of April 1, 1995,
May 1, 1995, First Amendments dated as of October 31, 1995,
Consulting Agreements dated as of July 12,1996 and September 19, 1995,
First Amendment dated as of January 1, 1996
(Full title of the plan)
Mr. Lynn Mabey
Murphy, Tolboe & Mabey
124 South 600 East, Suite 100
Salt Lake City, Utah 84102
(Name and Address of Agent for Service)
(801) 533-8505
(Telephone number, including area code, of agent for service)
=================
Copies of correspondence to:
David A. Fisher
Fisher Thurber, LLP
4225 Executive Square, Suite 1600
La Jolla, California 92037-1483
(619) 535-9400
===========================================================================
Calculation of Registration Fee
---------------------------------
Title of Amount to Proposed Proposed Amount
Secur-ities be Regist- Maximum Maximum of
to be ered(1) Offering Aggregate Registration
Registered Price Offering Fee
per Share Price (2)
(2)
- ---------- ----------- ---------- ---------- ------------
Common 645,314 $4.375 $2,823,249 $855.53
Stock, No shares
Par Value
(1) Includes 2,364 shares previously issued.
(2) Solely for the purpose of determining the registration fee,
based on the maximum price of the Common Stock issued, and to be
issued upon exercise of the Warrants which were granted in connection
with the referenced Employment Agreements and Consulting Agreements.
PART II
---------
Item 3. Incorporation of Documents by Reference
The following documents, which have been filed with the Securities and
Exchange Commission, are incorporated by reference as of their respective
dates and are a part hereof:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(b) The Quarterly Reports on Form 10-Q and Form 10-Q/A for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated April 6, 1988, as amended by an
amendment to Application or Report on Form 8 dated April 13, 1988.
Additionally, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment hereto which indicates that all of the shares of the Common Stock
offered hereby have been sold or which deregisters all such shares then
remaining unsold, shall be deemed to be incorporated by reference herein and
to be part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
None.
Item 6. Indemnification of Directors and Officers
The Bylaws of the Company provide that, subject to any limitations imposed
by the Utah Revised Business Corporation Act, the officers and directors of
the Company shall be indemnified by the Company against expenses, including
attorneys' fees, reasonably incurred in connection with or resulting from
the defense of any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person becomes or is
threatened to be made part of by reason of his position as an officer,
director, employee or agent of the Company or his service at the request of
the Company as an officer, director, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, provided
that, in the context of such action, such officer or director acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company, and with respect to any criminal action or
proceeding, such officer or director had no reasonable cause to believe his
conduct was unlawful.
Any indemnification made pursuant to the Bylaws shall be made only upon the
determination by a majority vote of a quorum of the Board of Directors,
provided, however, that such indemnification shall be made without such
determination to the extent that the officer or director is successful in
the defense of the action at issue. Additionally, any expenses incurred in
defense of an action against an officer or director shall be paid in advance
of final disposition of the action upon receipt of an undertaking by or on
behalf of such officer or director to repay the amount advanced if it is
ultimately determined that he is not entitled to be indemnified for such
expenses.
The Utah Revised Business Corporation Act (the "Code") permits the Company
to indemnify an Officer or Director who was or is a party or is threatened
to be made a party to any proceeding because of his or her position, if the
Officer or Director acted in good faith and in a manner he or she reasonably
believed to be in the best interests of the Company. The Code authorizes
the Company to advance expenses incurred in defending any such proceeding
under certain circumstances, and if the Officer or Director is successful
on the merits, it authorizes the Company to indemnify the Officer or
Director against all expenses, including attorneys' fees, incurred in
connection with any such proceeding.
The Company's Bylaws reflect the indemnification provisions contained in
the Utah Revised Business Corporation Act, except that pursuant to the
Utah Revised Business Corporation Act no indemnification may be made to an
officer or director in connection with an action by or in the right of the
Company. Additionally, no indemnification may be made where the officer or
director has been adjudged to be liable to the Company, unless and only to
the extent that the court in which the action or suit was brought shall
determine upon application that such person is fairly and reasonably
entitled to indemnity for such expenses as the court considers proper.
Registrant has currently in effect a claims made directors and officers
liability insurance and company reimbursement insurance policy protecting
its directors and officers against liability by reason of their being or
having been directors or officers. The directors and officers liability
portion of such policy covers all directors and officers of the registrant
and of certain subsidiary companies. The policy provides for a payment on
behalf of the directors and officers up to the policy limits for all Losses
(as defined) which the directors and officers, or any of them, shall become
legally obligated to pay, from claims made against them during the policy
period for defined Wrongful Acts. The directors and officers or any of them
shall become legally obligated to pay, from claims made against them during
the policy period for defined wrongful acts, which include; errors,
misstatements, misleading statements, acts or omissions, neglect or breach
of duty by the directors or officers in the discharge of their duties solely
in their capacity as directors and officers of the company, individually or
collectively. The insurance includes the cost of defenses, appeals, bonds,
settlements and judgments. The insurers limit of liability under the policy
is $1 million in the aggregate for all losses per year. The policy contains
various reporting requirements, deductibles, and exclusions.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
3.1.2 Restated Articles of Incorporation.(1)
4.20 Standard Executive Employment Agreement (SGI) dated as of
January 1, 1996 (except where noted) between Registrant and: Ernest P.
Esztergar; Richard Gibbens; R. Brent Lassetter; Elon A. Place; John R.
Taylor; Joseph A. Savoca; Ming Wang; David Newman (7/01/96); David Philips
(7/01/96).(2)
4.21 Standard Employment Agreement (SGI) dated as of January 1, 1996
(except where noted) between Registrant and: Jeffrey Montag; Nancy Propp;
Claudine Savatt; Kimberly Krmpotich (03/18/96); Barry Meisen (5/23/96);
Jessica Yates (12/2/96); Ellen D.E. Hill (6/4/96); Gina Hilton (7/18/96);
James LaBar (3/4/96); Casey Laris (9/30/96); Scott Reynolds (11/12/96);
Tanya Schaffer (8/1/96); Eric Weiner (7/29/96).(2)
4.22 Standard Executive Employment Agreement (AMS) dated as of January
1, 1996, between Registrant's subsidiary and; Clarence Dyksterhuis, Amir
Modarres-Khiabani; Dominick Savo.(2)
4.23 Standard Employment Agreement (AMS) dated as of January 1, 1996
(except where noted) between Registrant's subsidiary and: Dick Adlof; Helmut
Bader; Maykoe Baltodano; Steve Rodriques; Oscar Saldain; Alex Shishkin; Stan
Stock; Carl Timmerman; Gary Vasey; Ken Woolsey; Brian Bevis; Dave Burrows;
Jose Cruz; Neil DeGuire; James Fucich; Henry Galeano; Grigoriy Goldman;
Graham Greenaway; Mitch Johnson; Douglas King; Curtis Marple; Mike Moore;
Guenter Pust; Eric Regan; Edvin Gudelman (10/14/96); Andrew Kendrick (7/22/96);
Reza Eksir (5/28/96); Johnathan Pentzer (3/6/96); George Rivera (7/1/96);
Kathy Brickman (2/26/96).(2)
4.24 Employment Agreement dated as of May 1, 1995, between Registrant's
subsidiary and Amir Modarres-Khiabani.(2)
4.24.1 First Amendment to Employment Agreement dated as of October 31,
1995, between Registrant's subsidiary and Amir Modarres-Khiabani.(2)
4.25 Employment Agreement dated as of April 1, 1995, between
Registrant's subsidiary and Dominick Savo.(2)
4.25.1 First Amendment to Employment Agreement dated as of October 31,
1995, between Registrant's subsidiary and Dominick Savo.(2)
4.26 Consulting Agreement dated as of September 19, 1995, between
Registrant and Ebbe R. Skov.(2)
4.26.1 First Amendment to Consulting Agreement dated as of January 1, 1996
between Registrant and Ebbe R. Skov.(2)
4.27 Consulting Agreement dated as of July 12, 1996, between Registrant
and Judith Ware.(2)
5. Opinion of Fisher Thurber, LLP. regarding the legality of the
Common Stock registered hereby.(2)
23. Consent of Ernst & Young LLP, Independent Auditors.(2)
23.1 Consent of Fisher Thurber, LLP.(included in Exhibit 5).(2)
(1) Incorporated by reference to Annual Report on Form 10-K
(File No. 2-93124) for the year ended December 31, 1985.
(2) Filed herewith.
Item 9. Undertakings
The Company hereby undertakes:
(1) To file, during any period in which offers or sales of the Common
Stock are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided that if the information in paragraphs (i) and (ii) above and to be
included in a post-effective amendment hereto is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d)
of the Exchange Act and is incorporated by reference in the S-8 Registration
Statement, no post-effective amendment hereto shall be filed;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
Additionally, the undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act), that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Company pursuant tothe foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expense incurred or
paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
------------
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on December 27,
1996.
SGI INTERNATIONAL
By: /s/JOSEPH A. SAVOCA
- -----------------------------------------
Joseph A. Savoca, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
Signature Title Date
========= ====== ========
Chairman of the Board and
/s/ Chief Executive Officer
=================== December 27, 1996
Joseph A. Savoca
/s/ Director
=================== December 27, 1996
Ernest P. Esztergar
/s/ Director
=================== December 27, 1996
Norman A. Grant
/s/ Director
=================== December 27, 1996
William A. Kerr
/s/ Director
=================== December 27, 1996
Bernard V. Baus
/s/ Director
=================== December 27, 1996
William R. Harris
Exhibit Index
---------------
No. Description
4.20 Standard Executive Employment Agreement (SGI) dated as of
January 1, 1996 (except where noted) between Registrant and: Ernest P.
Esztergar; Richard Gibbens; R. Brent Lassetter; Elon A. Place; John R.
Taylor; Joseph A. Savoca; Ming Wang; David Newman (7/01/96); David Philips
(7/01/96).
4.21 Standard Employment Agreement (SGI) dated as of January 1, 1996
(except where noted) between Registrant and: Jeffrey Montag; Nancy Propp;
Claudine Savatt; Kimberly Krmpotich (03/18/96); Barry Meisen (5/23/96);
Jessica Yates (12/2/96); Ellen D.E. Hill (6/4/96); Gina Hilton (7/18/96);
James LaBar (3/4/96); Casey Laris (9/30/96); Scott Reynolds (11/12/96);
Tanya Schaffer (8/1/96); Eric Weiner (7/29/96).
4.22 Standard Executive Employment Agreement (AMS) dated as of January
1, 1996, between Registrant's subsidiary and; Clarence Dyksterhuis, Amir
Modarres-Khiabani; Dominick Savo.
4.23 Standard Employment Agreement (AMS) dated as of January 1, 1996
(except where noted) between Registrant's subsidiary and: Dick Adlof; Helmut
Bader; Maykoe Baltodano; Steve Rodriques; Oscar Saldain; Alex Shishkin; Stan
Stock; Carl Timmerman; Gary Vasey; Ken Woolsey; Brian Bevis; Dave Burrows;
Jose Cruz; Neil DeGuire; James Fucich; Henry Galeano; Grigoriy Goldman; Graham
Greenaway; Mitch Johnson; Douglas King; Curtis Marple; Mike Moore; Guenter
Pust; Eric Regan; Edvin Gudelman (10/14/96); Andrew Kendrick (7/22/96);
Reza Eksir (5/28/96); Johnathan Pentzer (3/6/96); George Rivera (7/1/96);
Kathy Brickman (2/26/96).
4.24 Employment Agreement dated as of May 1, 1995, between Registrant's
subsidiary and Amir Modarres-Khiabani.
4.24.1 First Amendment to Employment Agreement dated as of October 31,
1995, between Registrant's subsidiary and Amir Modarres-Khiabani.
4.25 Employment Agreement dated as of April 1, 1995, between
Registrant's subsidiary and Dominick Savo.
4.25.1 First Amendment to Employment Agreement dated as of October 31,
1995, between Registrant's subsidiary and Dominick Savo.
4.26 Consulting Agreement dated as of September 19, 1995, between
Registrant and Ebbe R. Skov.
4.26.1 First Amendment to Consultant Agreement dated as of January 1, 1996
between Registrant and Ebbe R. Skov.
4.27 Consulting Agreement dated as of July 12, 1996, between Registrant
and Judith Ware.
5. Opinion of Fisher Thurber, Ltd. Regarding the legality of the
Common Stock registered hereby.
23. Consent of Ernst & Young LLP, Independent Auditors.
23.1 Consent of Fisher Thurber, LLP (included in Exhibit 5)
SGI EXECUTIVE EMPLOYMENT AGREEMENT
This SGI EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is effective as of
the day of , 1996 (the "Effective Date"), by and between SGI
International, a Utah corporation ("SGI"), and, , an individual
("Employee").
In consideration of the mutual agreements and the promises herein contained,
the parties hereto agree as follows:
1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with SGI on the terms and conditions set forth in this Agreement.
2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1997, provided notice of
termination by Employer is given in writing Ninety (90) days prior to the
initial termination or any extended termination date, and provided further,
that the Agreement has not already been terminated earlier pursuant to
Section 5. If the Agreement is not so terminated at the end of the original
term or any succeeding term, and the Agreement has not been terminated
pursuant to Section 5, then it shall be automatically extended for an
additional one year period. Notwithstanding the above, in the event that
SGI is acquired, merged into another corporation, or there is a change of
management control at SGI brought about by a chance in the composition of
the board of directors, then this Agreement shall be extended on the date
of such change of management control for an additional one (1) year term,
subject to termination and enewal as described above.
3. Duties. Employee shall devote his full productive time to the duties
assigned to him. "Full productive time" is hereby defined as that time
reasonably necessary to perform his required duties in a timely manner, but
not less than forty (40) hours per week, for fifty-two (52) weeks per year,
less holidays, sick leave, and vacation time in accordance with the then
prevailing policies of SGI as set forth in the SGI Employee Handbook, which
is hereby incorporated herein by this reference. Employee's performance shall
be reviewed at least annually by SGI.
4. Compensation. As full compensation for Employee's services hereunder,
SGI agrees to pay Employee the following:
(a) Employee shall receive a salary in the amount set forth in Exhibit A,
attached hereto and incorporated herein, for the first year of this
Agreement, payable on the fifteenth and last day of each month. Employee
shall also be covered by SGI's group medical insurance, and such other group
benefits granted to employees pursuant to the then prevailing policies of SGI.
(b) As incentive compensation, SGI Warrants in an amount to be decided in
the sole discretion of SGI's Board of Directors.
(c) As further incentive compensation, such bonuses and benefits as SGI's
Board of Directors, in its sole discretion, shall determine.
(d) Compensation shall be reviewed by SGI and Employee at least annually.
5. Involuntary Termination. This Agreement shall be deemed terminated
and the employment relationship between SGI and Employee severed upon the
occurrence of any of the following:
(a) Employee dies.
(b) Employee fails or refuses to faithfully and diligently perform the
usual customary duties of his employment or adhere to the reasonable
policies, standards, and regulations of SGI, which from time to time may
be established.
(c) Employee is discharged by SGI for cause.
6. Voluntary Termination. Employee may voluntarily terminate at any time
by giving Employer two weeks written notice of termination.
7. Rights Upon Termination. In the event this Agreement is terminated,
any amount due to Employee shall be prorated as of the date of termination
and paid to the Employee, or to his estate, as appropriate.
8. General Relationship. Employee shall be considered an employee of SGI
within the meaning of all federal, state, and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workmen's compensation, industrial accident, labor and taxes.
9. Assignment. This Agreement can not be assigned by either party.
10. Severability. In the event that any of the provisions of this
Agreement are deemed to be invalid or unenforceable, the same shall be
deemed severable from and shall not cause the invalidity of the remainder
of this Agreement.
11. Prior Agreements. This Agreement contains the sole and entire
agreement between the parties with respect to the entire subject matter
hereof, and any and all prior discussions, negotiations, commitments,
understandings and agreements relating thereto are hereby superseded and
terminated as of the Effective Date. No representations, whether written
or oral, express or implied, other than those contained herein, have been
made by any party hereto.
12. Notices. All notices, requests, demands and other communications
required or permitted by this Agreement shall be in writing and shall be
deemed to have been duly delivered upon:
(i) personal delivery to the party to whom such notice is to be given; or
(ii) five (5) business days after deposit in the United States mail, first
class postage prepaid and properly addressed to such party.
13. Miscellaneous.
(a) The failure of either party at any time to require performance by in
accordance with the strict terms of this Agreement shall in no way effect
the other such party's rights thereafter to enforce the same, nor shall
the waiver of any breach of any provision hereof be held to be a waiver
of any succeeding breach of any provision or a waiver of the provision itself.
(b) This Agreement cannot be modified except by a writing signed by the
parties.
(c) This Agreement shall be interpreted in accordance with the laws of the
State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at San Diego, California.
SGI International, a Utah Corporation
By: /s/ By: /s/
================================= =====================
Joseph A. Savoca, Chairman/CEO Employee
Exhbit 4.20
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is effective as of this day of 1996
(the "Effective Date"), by and between SGI International, a Utah Corporation
("SGI"), and an individual ("Employee").
In consideration of the mutual agreements and the promises herein contained,
the parties hereto agree as follows:
1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with SGI on the terms and conditions set forth in this Agreement.
2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and continue until terminated, which may be done by either
party at any time on fourteen (14) days written notice to the other party.
3. Duties. Employee shall devote his full productive time to the duties
assigned to him. "Full productive time" is hereby defined as that time
reasonably necessary to perform his required duties in a timely manner,
but not less than forty (40) hours per week, for fifty-two (52) weeks per
year, less holidays, sick leave, and vacation time in accordance with the
then-prevailing policies of SGI.
4. Compensation. In consideration of Employee's performing the duties
described herein, SGI agrees to compensate employee as set forth in Exhibit
A, attached hereto and incorporated herein, payable on the fifteenth and
the last day of each month. Employee shall also be covered by SGI's Group
Medical Insurance, and such other group benefits granted to employees
pursuant to the then prevailing policies of SGI.
Employee shall also receive:
(a) As incentive compensation, such bonuses and benefits as SGI's Board
of Directors, in its sole discretion, shall determine.
(b) As further incentive compensation, SGI Warrants in an amount to be
decided in the sole discretion of SGI's Board of Directors.
(c) Reimbursement of reasonable business expenses incurred by Employee in
accordance with SGI's policies.
(d) Compensation shall be reviewed by SGI and Employee at least annually.
5. Integration. This Agreement shall not be modified or amended, except by
a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at La Jolla, California.
SGI International, 1200 Prospect Street, Ste. 325, La Jolla, CA 92037
By: /s/ By: /s/
===================== =======================
Joseph A. Savoca, Chairman/CEO Employee
Exhibit 4.21
ASSEMBLY AND MANUFACTURING SYSTEMS EXECUTIVE EMPLOYMENT AGREEMENT
This Assembly and Manufacturing Systems Executive Employment Agreement
("Agreement") is effective as of the day of ,1996 (the Effective
Date), by and between Assembly and Manufacturing Systems, a California
Corporation ("AMS"), and, an individual ("Employee").
In consideration of the mutual agreements and the promises herein contained,
the parties hereto agree as follows:
1. Employment. AMS hereby employs Employee and Employee hereby accepts
employment with AMS on the terms and conditions set forth in this Agreement.
2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1997, provided notice of
termination by Employer is given in writing Ninety (90) days prior to
the initial termination or any extended termination date, and provided
further, that the Agreement has not already been terminated earlier
pursuant to Section 5. If the Agreement is not so terminated at the end
of the original term or any succeeding term, and the Agreement has
year period. Notwithstanding the above, in the event that AMS is acquired,
merged into another corporation, or there is a change of management control
at AMS brought about by a chance in the composition of the board of
directors, then this Agreement shall be extended on the date of such
change of management control for an additional one (1) year term, subject
to termination and renewal as described above.
3. Duties. Employee shall devote his full productive time to the duties
assigned to him. Full "productive time" is hereby defined as that time
reasonably necessary to perform his required duties in a timely manner,
but not less than forty (40) hours per week, for fifty-two (52) weeks per
year, less holidays, sick leave, and vacation time in accordance with the
then-prevailing policies of AMS as set forth in the AMS Employee Handbook,
which is hereby incorporated herein by this reference.
4. Compensation. As full compensation for Employee's services hereunder,
AMS agrees to pay Employee the following:
(a) Employee shall receive a salary in the amount set forth in Exhibit A,
attached hereto and incorporated herein, for the first year of this
Agreement, payable weekly. Employee shall also be covered by AMS's group
medical insurance, and such other group benefits granted to employees
pursuant to the then prevailing policies of AMS.
(b) As incentive compensation, SGI Warrants in an amount to be decided
in the sole discretion of SGI's Board of Directors.
(c) As further incentive compensation, such bonuses and benefits as AMS'
Board of Directors, in its sole discretion, shall determine.
(d) Compensation shall be reviewed by AMS and Employee at least annually.
5. Involuntary Termination. This Agreement shall be deemed terminated
and the employment relationship between AMS and Employee severed upon the
occurrence of any of the following:
(a) Employee dies.
(b) Employee fails or refuses to faithfully and diligently perform the
usual customary duties of his employment or adhere to the reasonable
policies, standards, and regulations of AMS, which from time to time may
be established.
(c) Employee is discharged by AMS for cause.
6. Voluntary Termination. Employee may voluntarily terminate at any time
by giving Employer two week written notice of termination.
7. Rights Upon Termination. In the event this Agreement is terminated,
any amount due to Employee shall be prorated as of the date of termination
and paid to the Employee, or to his estate, as appropriate.
8. General Relationship. Employee shall be considered an employee of
AMS within the meaning of all federal, state, and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workmen's compensation, industrial accident, labor and taxes.
9. Assignment. This Agreement cannot be assigned by either party.
10. Severability. In the event that any of the provisions of this
Agreement are deemed to be invalid or unenforceable, the same shall be
deemed severable from and shall not cause the invalidity of the remainder
of this Agreement.
11. Prior Agreements. This Agreement contains the sole and entire
agreement between the parties with respect to the entire subject matter
hereof, and any and all prior discussions, negotiations, commitments,
understandings and agreements relating thereto are hereby superseded
and terminated as of the Effective Date. No representations, whether
written or oral, express or implied, other than those contained herein,
have been made by any party hereto.
12. Notices. All notices, requests, demands and other communications
required or permitted by this Agreement shall be in writing and shall
be deemed to have been duly delivered upon:
(i) personal delivery to the party to whom such notice is to be given;
or (ii) five (5) business days after deposit in the United States mail,
first class postage prepaid and properly addressed to such party.
13. Miscellaneous.
(a) The failure of either party at any time to require performance by
in accordance with the strict terms of this Agreement shall in no way
effect such party's rights thereafter to enforce the same, nor shall
the waiver of any breach of any provision hereof be held to be a waiver
of any succeeding breach of any provision or a waiver of the provision
itself.
(b) This Agreement cannot be modified except by a writing signed by
the parties.
(c) This Agreement shall be interpreted in accordance with the laws
of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed at Simi Valley, California.
Assembly & Manufacturing Systems,
A California Corporation
By: /s/ /s/
================================== ==========================
Joseph A. Savoca, Chairman/CEO Employee
Exhibit 4.22
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is effective as of this day of
, 1996 (the "Effective Date"), by and between Assembly &
Manufacturing Systems Inc., a California Corporation ("AMS"), and ,
an individual ("Employee").
In consideration of the mutual agreements and the promises herein contained,
the parties hereto agree as follows:
1. Employment. AMS hereby employs Employee and Employee hereby accepts
employment with AMS on the terms and conditions set forth in this Agreement.
2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and continue until terminated, which may be done by either
party at any time on fourteen (14) days written notice to the other party.
3. Duties. Employee shall devote his full productive time to the duties
assigned to him. "Full productive time" is hereby defined as that time
reasonably necessary to perform his required duties in a timely manner,
but not less than forty (40) hours per week, for fifty-two (52) weeks per
year, less holidays, sick leave, and vacation time in accordance with the
then-prevailing policies of AMS. Employee's performance shall be reviewed
at least annually by AMS.
4. Compensation. In consideration of Employee's performing the duties
described herein, AMS agrees to compensate employee at the rate of .
Employee shall also be covered by AMS's Group Medical Insurance, and such
other group benefits granted to employees pursuant to the then prevailing
policies of AMS.
Employee shall also receive:
(a) As incentive compensation, such bonuses and benefits as AMS's Board
of Directors, in its sole discretion, shall determine.
(b) As further incentive compensation, SGI Warrants in an amount to be
decided in the sole discretion of SGI's Board of Directors.
(c) Reimbursement of reasonable business expenses incurred by Employee in
accordance with AMS's policies.
(d) Compensation shall be reviewed by AMS and Employee at least annually.
5. Integration. This Agreement shall not be modified or amended, except by
a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at Simi Valley, California.
Assembly & Manufacturing Systems, Inc. Employee
2222 Shasta Way
Simi Valley, CA 93065
By: /s/ /s/
- ----------------------------------- ------------------------
Dominick S. Savo, President
Exhbit 4.23
EMPLOYMENT AGREEMENT
This is an Employment Agreement (the "Agreement") made effective as of
May 1. 1995, between and among ASSEMBLY & MANUFACTURING SYSTEMS CORP.
(f.k,a. AUTOMATION TOOLING SYSTEMS CORP), a California corporation having
its principal place of business located at 2222 Shasta Way, Simi Valley,
California 93065 ("EMPLOYER") and AMIR KHIABANI ("EMPLOYEE"),
Section 1.0 - Recitals
l.l EMPLOYEE has rendered services to EMPLOYER over a period of
many months in various capacities, e.g. just prior to the recent sale of
EMPLOYER, EMPLOYEE was project manager of EMPLOYER,
l.2 EMPLOYEE represents that he has extensive experience and
comprehensive knowledge of the business of EMPLOYER, Based upon EMPLOYEE's
representation regarding his experience and abilities, EMPLOYER has a
compelling need for his continued association as executive, officer and
director of EMPLOYER, to assure the continued association and services of
EMPLOYEE, to retain and utilize his experience, skills, abilities, background
and knowledge, and to facilitate long-range planning and growth of the
business of EMPLOYER in an orderly and efficient manner, EMPLOYER is willing
to continue to employ EMPLOYEE upon the terms and conditions set forth
hereinafter,
1.3 EMPLOYEE is willing to continue rendering services to EMPLOYER
upon the terms and conditions set forth hereinafter,
l.4 NOW, THEREFORE, in consideration of the foregoing recitals
and of the promises and conditions herein contained, the parties agree as set
forth below.
Section 2.0 - Employment
2.1 Powers and Duties, EMPLOYEE shall be employed by EMPLOYER as
its Vice President of Operations, EMPLOYEE shall have powers and duties
consistent with such position and shall report directly to the President of
EMPLOYER,
2.2 Term of Employment. The term of this Agreement and
EMPLOYEE'S employment shall be two (2) years, unless sooner terminated as a
result of the following: (i) retirement of the EMPLOYEE; (ii) death of
EMPLOYEE; (iii) an Involuntary Termination pursuant to a Disabling Event
under Section 6.1; (iv) an Employer Termination For Cause pursuant to
Section 6.2; (v) an Employer Termination For Cause pursuant to Section 6,3;
(vi) an Employer Termination Without Cause pursuant to Section 6.4 or
(vii) a Voluntary Termination pursuant to Section 6.5. The initial and
any subsequent term of this Agreement shall be automatically renewed for
a period of one year unless EMPLOYEE notifies EMPLOYER, or EMPLOYER
notifies EMPLOYEE, in writing at least 30 days prior to expiration of the
then current term of this Agreement that the Agreement shall not be renewed,
2.3 Time to be Devoted to Employment. Except for annual
vacations taken pursuant to Section 4.1, during the employment term the
EMPLOYEE shall devote his full time and energy to the business of EMPLOYER.
EMPLOYEE shall not be engaged in any other business activity which, in the
reasonable judgment of the Board of Directors of EMPLOYER, conflicts with
the duties of the EMPLOYEE hereunder, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; provided, however,
that EMPLOYEE may, without violating the provisions of this Section 2.3 own
less than 5% of the outstanding capital stock of a company whose shares are
actively traded on a public securities exchange or a public over-the-counter
market,
Section 3.0 - Compensation of the EMPLOYEE
3.1 Annual Salary. As compensation for the services to be
performed hereunder, the EMPLOYEE shall receive a salary at the rate of
Eighty-Nine Thousand Five Hundred Dollars ($89,500,00) per annum, payable
in equal weekly installments ("Regular Compensation") which shall be
adjusted semi-annually for any change upward from the preceding semi-annual
period in the cost-of-living index for the Los Angeles/Long Beach region as
compiled by the United States Department of Labor (the "semi-annual COLA"),
3.2 Salary Continuation During Disability. If the EMPLOYEE for
any reason whatsoever suffers a Disabling Event (defined in Section 6.1)
during the term of his employment, EMPLOYER agrees that, if the EMPLOYEE
is involuntarily terminated pursuant to Section 6.1. it will pay the EMPLOYEE
an amount equal to seventy percent (70%) of the Regular Compensation he is
receiving at the time of occurrence of the Disabling Event, payable as set
forth above. Such payment shall be increased semi-annually by COLA and shall
continue for so long as EMPLOYEE is disabled and thereafter until the
earlier of the following events occurs: (i) EMPLOYEE is rehired by EMPLOYER
for a salary and executive position at least equal to his executive position
nd his Regular Compensation at the time of occurrence of the Disabling Event
plus accrued semi-annual COLA, or (ii) the second anniversary date of the
Disabling Event,
3.3 Tax Withholding. EMPLOYER shall have the right to deduct or
withhold, from any amounts of money due the EMPLOYEE and/or his spouse, any
and all sums required for federal income and Social Security taxes, together
with all state and local taxes now applicable or that may be enacted and
become applicable in the future.
3.4 Incentive Compensation.
3.4.1 In addition to Regular Compensation, EMPLOYEE shall
be entitled to incentive compensation ("Incentive Compensation") from
EMPLOYER, payable in a lump sum on or before thirty days (30) following each
anniversary date of this Agreement, including its expiration date. EMPLOYER'S
obligation to pay Incentive Compensation shall survive expiration of this
Agreement,
3.4.2 The amount of Incentive Compensation payable to
EMPLOYEE shall be based on the following percentages of the Pretax Earnings
(defined below) of EMPLOYER, determined as of each anniversary date of this
Agreement, for the immediately preceding 12-month period:
3.4.2.1 If Pretax Earnings for the applicable 12-month
period equal or exceed the Projected Pretax Earnings (defined below) for
such 12-month period, EMPLOYEE shall receive Incentive Compensation equal to
20% of EMPLOYEE'S then current annual Regular Compensation, payable as
aforesaid.
3.4.2.2 If Pretax Earnings for the applicable 12-month
period exceed the Projected Pretax Earnings (defined below) for such 12-month
period by 20% or more, EMPLOYEE shall receive additional Incentive
Compensation [in addition to the Incentive Compensation payable under
Section 3, 4, 2.1 above)] equal to 20% of EMPLOYEE'S then current annual
Regular Compensation, payable as aforesaid,
3.4.3 "Pretax Earnings" means the pretax earnings of the
EMPLOYER in whatever form the businesses of EMPLOYER may be conducted
(including, without limitation, as a subsidiary or subsidiaries, as a
division or divisions, or as part of a subsidiary or division of any current
or future parent of EMPLOYER, or any subsidiary or affiliate thereof
(collectively, "Parent Company")], determined in accordance with generally
accepted accounting principles, consistently applied, except that solely
for the purpose of such definition (i) no deduction shall be made for
federal, state or local income or excise taxes; (ii) no deduction shall be
made for Parent Company head office or corporate charges, other than charges
for specific necessary services supplied at fair market value; (iii) no
deduction shall be made for amortization of goodwill; (iv) no deduction for
interest on funds advanced by the Parent Company shall be made for any
fiscal period, other than interest (at not greater than the then fair market
rate) on funds advanced by the Parent Company at the request of EMPLOYEE for
operating capital; (v) a net loss incurred for any fiscal period shall not
be carried back to offset earnings for any prior fiscal period, but
it shall be carried forward to offset pretax earnings for subsequent fiscal
periods until such net loss is depleted; (vi) no deduction shall be made for
management fees paid by EMPLOYER to the Parent Company, provided that this
clause shall not be deemed to prevent the deduction of head office or corporate
charges subject to the limitation specified in clause (ii); and (vii) no
deduction shall be made for any dividend or redemption payments.
3.4.4 "Projected Pretax Earnings" means the Pretax
Earnings projected in a EMPLOYER budget approved by the President of EMPLOYER,
3.4.5 Past due Incentive Compensation shall earn interest at
the rate of 10% per annum, compounded daily, until paid.
Section 4.0 - Employee Benefits
4.1 Annual Vacation. EMPLOYEE shall be entitled to three (3)
weeks vacation time each year without loss of compensation. If EMPLOYEE
is unable for any reason to take the total amount of vacation time authorized
herein during any year, he may elect to do either or both of the following:
(i) accrue the unused time and add it to vacation time for the following
year provided the number of vacation days accrued may not result in EMPLOYEE
being entitled to more than four (4) weeks vacation time for that following
year and/or (ii) receive a cash payment for all or such part thereof not
accrued as aforesaid in an amount equal to the amount of Regular Compensation
attributable to that period of time. If EMPLOYEE fails to make an election
by notice to EMPLOYER prior to the end of such following year, he shall be
deemed to have elected a cash payment as provided in clause (ii) above for
all unused time, and EMPLOYER shall deliver the payment to EMPLOYEE within
thirty (30) days following the end of such following year.
4.2 Automobile Allowance. Within ten (10) days following the
beginning of each month during the, term of this is Agreement, EMPLOYER
shall pay EMPLOYEE the sum of Five Hundred Dollars ($500,00) as an automobile
allowance, Such sum shall be increased within thirty (30) days following the
January 1 of each fourth calendar year during the term of EMPLOYEE'S
employment to reflect the semi-annual COLA,
4.3 Contributory Savings Plan. EMPLOYEE shall continue to be
entitled to be a participant in any EMPLOYER savings plan established under
Section 4.01(k) of the Internal Revenue Code.
4.4 Medical, Etc., Insurance Coverage. EMPLOYER agrees to
include EMPLOYEE, and those of his children who qualify as EMPLOYEE'S
dependents under Section 152 of the Internal Revenue Code, in the coverage
of all of EMPLOYER'S medical, hospital, surgical, dental and other group
health and accident insurance plan(s).
4.5 Death Benefits. If EMPLOYEE should die during the employment
term, EMPLOYER agrees to pay the premiums upon the health and dental
insurance of EMPLOYER to which EMPLOYEE'S dependents are then entitled to
subscribe under the Consolidated omnibus Reconciliation Act of 1986
("Cobra"); such premium payments by EMPLOYER shall continue for the extension
period of thirty-six (36) months following the death of EMPLOYEE.
4.6 Key-Man Insurance. EMPLOYER may, at its election and for
their benefit, purchase "key-man" insurance insuring the EMPLOYEE against
accidental loss or death, EMPLOYEE shall submit to such physical examination
and supply such information as may be required in connection therewith.
4.7 Miscellaneous.
4.7.1 It is understood and agreed that the services required by
EMPLOYER will require EMPLOYEE to incur entertainment expenses during the
employment term on behalf of EMPLOYER, EMPLOYER shall make available to
EMPLOYEE sufficient funds for this purpose at such times as EMPLOYEE shall
request, in each instance, EMPLOYEE shall furnish to EMPLOYER adequate
records and other documentary evidence required by federal and state (or
their equivalents) statutes and regulations for the substantiation of each
such expenditure as an income tax deduction,
4.7.2 During the employment term EMPLOYER shall pay all reasonable
dues and fees necessary to maintain EMPLOYEE'S membership in such
professional organizations as EMPLOYEE may reasonably select.
4.7.3 In addition to the foregoing specifically provided benefits,
EMPLOYEE shall be entitled to and shall receive during the employment term
all other benefits and conditions of employment generally available to
full-time salaried employees of EMPLOYER,
Section 5.0 - Business Expenses
5.1 Reimbursement of other business Expenses.
5.1.1 EMPLOYER shall promptly reimburse EMPLOYEE for all other
reasonable business expenditures incurred by the EMPLOYEE in connection
with the business of the EMPLOYERS,
5.1.2 Each such expenditure shall be reimbursable only if it is
of a nature qualifying it as a proper deduction on the federal and state
income tax return of the applicable
EMPLOYER. Section 6.0 - Termination of the Agreement
6.1 Involuntary Termination. If EMPLOYEE for any reason
whatsoever becomes permanently incapacitated or disabled so that he is
mentally or physically incapable of performing the duties prescribed
herein for a period of (i) three (3) months or longer (defined as a
"Disabling Event"), EMPLOYER may, at that time or at any time thereafter,
at its option, terminate the employment of EMPLOYEE under this Agreement
immediately upon giving him notice to that effect (such termination and a
termination by operation of clause (ii) of Section 2.2. being hereinafter
called "Involuntary Termination"). An Involuntary Termination under this
Section 6.1 (for a Disabling Event) shall be subject to the provisions of
Section 3.2.
6.2 EMPLOYER Termination for Cause. EMPLOYER may terminate the
employment of EMPLOYEE hereunder at any time during the employment term for
"cause" (such termination being herein called a "EMPLOYER Termination for
Cause") by giving EMPLOYEE written notice of such termination specifying the
grounds upon which EMPLOYER seeks to terminate the employment of EMPLOYEE.
Such termination shall be effective no sooner than sixty (60) days after
delivery of the aforesaid notice to EMPLOYEE provided, however, that
EMPLOYER may relieve EMPLOYEE from the obligation to perform his duties
during such sixty (60) days after delivery of the notice, for the purposes of
this Section 6.2, "cause" means (i) EMPLOYEE'S willful and substantial
misconduct with respect to the business and affairs of EMPLOYER; (ii) the
commission by EMPLOYEE of embezzlement, fraud, or other like crime involving
money or other property of EMPLOYER; or (iii) EMPLOYEE'S material breach of
an expressly stated material obligation under this Agreement; and (iv)
EMPLOYEE'S failure to cure the same to EMPLOYER'S reasonable satisfaction
within sixty (60) days after receiving the aforesaid notice from EMPLOYER,
6.3 EMPLOYEE Termination For Cause. EMPLOYEE may terminate this
Agreement at any time during the employment term for "cause" (such
termination being herein called an "EMPLOYEE Termination for Cause") by
giving EMPLOYER notice of such termination which shall be effective no
sooner than sixty (60) days after delivery of the notice to EMPLOYER provided,
however, that EMPLOYER may relieve EMPLOYEE from the obligation to perform his
duties during such sixty (60) days after delivery of the notice, for the
purposes of this Section 6.3, "cause" means material breach by EMPLOYER of
one or more of its obligations under this Agreement,
6.4 EMPLOYER Termination Without Cause EMPLOYER may terminate the
employment of EMPLOYEE hereunder at any time during the employment term
without "cause" (such termination being herein called an "EMPLOYER
Termination Without Cause") by giving EMPLOYEE notice of such termination
which shall be effective immediately upon delivery of the notice to EMPLOYEE,
6.5 Voluntary Termination. Any termination of the employment of
EMPLOYEE otherwise than as a result of an Involuntary Termination, an
EMPLOYER Termination For Cause, an EMPLOYER Termination Without Cause or an
EMPLOYEE Termination For Cause shall be deemed to be a "Voluntary
Termination", A Voluntary Termination shall be effective as specified in a
written notice of termination provided, however, that EMPLOYER may relieve
EMPLOYEE of the obligation to perform his duties after the delivery of the
written notice of termination.
6.6 Effect of Termination of EMPLOYEE'S Employment.
6.6.1 Upon the termination of EMPLOYEE'S employment hereunder
pursuant to a Voluntary Termination or an EMPLOYER Termination For Cause,
neither EMPLOYEE nor his beneficiary(s) or estate shall have any surviving
rights or claims against any of EMPLOYER except to receive promptly upon
such termination: (i) any unpaid portion of EMPLOYEE'S Regular Compensation
provided for in Section 3.1 and Incentive Compensation provided for in
Section 3.4 computed on a pro rata basis to the date of termination; (ii)
reimbursement for any expenses for which EMPLOYEE is entitled to
reimbursement under this Agreement and for which he shall not have received
payment; (iii) payment for any unused annual vacation time for which EMPLOYEE
has not been compensated as of the date of termination; (iv) all employee
benefits vested in EMPLOYEE and/or his dependents, including, without
limitation, the benefits specified in Section 7.1 and (v) in the case of
an EMPLOYER Termination for Cause only, payment of an amount equal to the lesser
of (x) three (3) months' of EMPLOYEE'S Regular Compensation or (y) Employee's
Regular Compensation for the remainder of the term of the Agreement, in each
case computed at the rate in effect on the date of such termination and in each
case payable in equal weekly installments.
6.6.2 Upon the termination of EMPLOYEE'S employment
hereunder pursuant to an Involuntary Termination, neither EMPLOYEE nor his
beneficiary(s) or estate shall have any surviving rights or claims against
EMPLOYER except to receive promptly upon such termination: (i) payments and
benefits specified in Sections 6.6.1 and 7.1; (ii) if such Involuntary
Termination is due to a Disabling Event, payments pursuant to Section 3.2;
and (iii) if such Involuntary Termination is due to the death of EMPLOYEE,
payment of all death benefits provided under Section 4.5.
6.6.3 Upon the termination of EMPLOYEE'S employment under
this Agreement pursuant to an EMPLOYER Termination Without Cause or an
EMPLOYEE Termination For Cause, neither EMPLOYEE nor his beneficiary(s) or
estate shall have any surviving rights or claims against EMPLOYER except to
receive promptly upon such termination: (i) payments and benefits specified
in Sections 6.6.1 and 7.2; (ii) payment of an amount equal to the greater of
(x) three (3) months of EMPLOYEE'S Regular Compensation or (y) Employee's
Regular compensation for the remainder of the term of the Agreement, in each
case computed at the rate in effect on the date of such termination and in
each case payable in equal weekly installments; and (iii) payment of the
premium payments due upon the health and dental insurance for the entire period
to which EMPLOYEE is entitled to subscribe under Cobra as a result of such
termination; and (iv) transfer without charge to EMPLOYEE of the entire
interest, if any, which EMPLOYEE does not own on the date of such termination
in the life insurance policy, if any, on the EMPLOYEE's life provided for
in Section 4.6.
Section 7.0 - Stock Bonus Plan
7.1 Restricted Stock Option.
7.1.1 EMPLOYER hereby grants EMPLOYEE the option to purchase
shares of its common stock, exercisable on and after each anniversary
date of this Agreement and any extensions thereof (each such anniversary
date being hereinafter referred to as "Exercise Date"), at a price equal
to 75% of its fair market value on the Exercise Date ("Option").
7.1.2 The number of shares subject to the Option on each
Exercise Date shall be determined by dividing 40% of EMPLOYEE'S regular
compensation on the applicable Exercise Date by the exercise price. For
example, if the EMPLOYEE'S Regular Compensation is $100,000 per annum on
the first anniversary date of this Agreement (i.e., the first Exercise Date),
the number of shares subject to the option vesting on such anniversary date
would determined by dividing 40,000 (40% of $100,000) by the then fair market
per share value of EMPLOYER'S shares. If the fair market value is $1,00 per
share, the maximum number of shares subject to such option would be 40,000
shares.
7.1.3 The Option shall be exercisable as to the shares
optioned on the applicable Exercise Date for a period of ten (10) years
following such Exercise Date.
7.1.4 If EMPLOYEE'S employment by EMPLOYERS is terminated
for any reason, only that portion of the option exercisable at the time of
such termination of employment may thereafter be exercised by EMPLOYEE or,
in the case of termination by EMPLOYEE'S death, by EMPLOYEE'S legal
representative(s).
7.1.5 This Option is not intended to be and shall not be
treated as an incentive stock option under Section 4.2.2 of the Internal
Revenue Code unless this sentence has been manually lined out and its
deletion is followed by the signature of a corporate officer of EMPLOYER
and EMPLOYEE.
/s/ Dominick Savo
______________________________
EMPLOYER Signature
/s/ Amir Khiabani
_________________________________
EMPLOYEE Signature
If the parties elect to treat the option as an incentive stock option under
Section 4.2.2 as herein provided, the Option shall be subject to, and
EMPLOYER and EMPLOYEE agree to be bound by, all of the terms and conditions
of EMPLOYER'S stock option plan to which this Option shall be subject, as
the same may be amended from time to time in accordance with the terms
thereof, provided no such amendment shall deprive EMPLOYEE of this Option or
any of his rights hereunder.
7.1.6 EMPLOYEE may not transfer this Option except by will or
the laws of descent and distribution, This Option shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way,
whether by operation of law or otherwise, and shall be exercisable during
the EMPLOYEE'S lifetime only by EMPLOYEE or his guardian or legal
representative.
7.2 Merger. If EMPLOYER merges with another company, EMPLOYEE
will have the option to purchase shares of the new company on the same basis.
These shares will be made available through Bently Finance Corporation, a
Delaware corporation.
8.0 General Provisions
8.1 Notices. Notices and other communications among the parties
shall be in writing and shall be delivered personally or sent by air courier
or first class certified or registered mail, return receipt requested and
postage prepaid, addressed as follows:
If to the EMPLOYEE:
Mr. Amir Khiabani
2500 Ashmore Circle, #26
Thousand Oaks, California 91362
If to EMPLOYER
2222 Shasta Way,
Simi Valley, California 93065
Attention: Mr. Dominick Savo President
All notices and other communications given to any party in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date of delivery if personally delivered; on the business day after the date
when sent if sent by air courier; and on the third business day after the
date when sent if sent by mail, in each case addressed to such party as
provided in this Section 8.1 or in accordance with the latest unrevoked
direction from such party.
8.2 Binding Agreement; Benefit. The provisions of this Agreement
will be binding upon, and will inure to the benefit of, the respective heirs,
representatives, assigns and successors of the parties.
8.3 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, USA.
8.4 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement by any other party(s) must be in writing and
shall not operate or be construed as a waiver of any subsequent breach by
such other party(s).
8.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
8.6 EMPLOYEE Liability to EMPLOYER. EMPLOYEE shall not be liable
to EMPLOYER for any action taken or omitted to be taken by him except in the
case of his own failure to exercise the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of a company
with similar purposes.
8.7 Indemnification of the EMPLOYEE To the extent not expressly
prohibited by applicable law, and regardless of whether or not EMPLOYEE
succeeds on the merits of any litigation, EMPLOYER, jointly and severally,
shall defend, indemnify and hold harmless EMPLOYEE from any and all costs,
expenses, damages, claims, liabilities and judgments (including the
reasonable costs of the defense of any claim or action and any sums which may
be paid with the consent of EMPLOYER in settlement thereof) which may be
incurred by or awarded against EMPLOYEE, by reason of any action taken or
omitted to be taken on behalf of EMPLOYER or in furtherance of its interests,
EMPLOYEE shall not be entitled to claim any indemnity or reimbursement under
this Section 8.7 to the extent the same is in respect of any cost, expense,
damage or claim that may be incurred by EMPLOYEE which results from the failure
of EMPLOYEE to act in accordance with the provisions of this Agreement and
the "prudent man" standard of care set forth in Section 8.6. To the extent
permitted by applicable law, EMPLOYERS shall make prompt payment of
litigation expenses at the request of EMPLOYEE in advance of payment of
indemnification. In defending any appeal by EMPLOYEE of a determination that
EMPLOYEE has not met the requisite standard of conduct required for
indemnification under this Section 8.7. EMPLOYER shall be required to prove
under applicable standards of proof that EMPLOYEE has not met such standard
of conduct in order to prevail.
8.9 Assignment. This Agreement is personal in its nature and
no party shall, without the consent of all the others, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that
the provisions hereof shall inure to the benefit of, and be binding upon (i)
each successor of any of the corporate parties, whether by merger,
consolidation, transfer of all or substantially all assets, or otherwise and
(ii) the heirs and legal representatives of EMPLOYEE.
8.10 Section Headings and Cross-References. The section
headings contained in this Agreement are for convenience only and will not
be construed as part of this Agreement, Cross-references to section numbers
in this Agreement shall be construed to refer only to the sections of this
Agreement and not to the sections of any exhibit incorporated into or referred
to herein, unless expressly indicated otherwise.
8.11 Amendments. No amendments or additions to this Agreement shall
be binding unless reduced to writing and signed by all the parties, except
as otherwise may be specifically provided herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
"EMPLOYER"
ASSEMBLY AND MANUFACTURING SYSTEMS CORP.
/s/
____________________________
Dominick Savo, President
EMPLOYEE
/s/
__________________________
Amir Khiabani
Exhibit 4.24
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment is made and entered into as of October 31, 1995, by
and between Assembly and Manufacturing Systems Inc. ("AMS"), and Amir
Khiabani ("Employee").
For good and adequate consideration, receipt of which is hereby acknowledged,
that certain Employment Agreement between AMS and Employee, dated as of
May 1, 1995, is hereby amended by the addition of a clause 3.4.6 as follows:
"3.4.6. As additional incentive compensation, such warrants to purchase the
common stock of AMS' parent, SGI International, a Utah Corporation ("SGI"),
upon such terms and conditions as the SGI Board of Directors shall determine,
in its sole discretion."
Employee Employer
AMS
/s/ /s/
By:----------------- --------------------------
Amir Khiabani Joseph A. Savoca, Chairman
Exhibit 4.24.1
EMPLOYMENT AGREEMENT
This is an Employment Agreement (the "Agreement") made effective as of
April 1, 1995, between ASSEMBLY & MANUFACTURING SYSTEMS INC. (fka "Automation
Tooling Systems Corp."), a California corporation having its principal place
of business located at 2222 Shasta Way, Simi Valley, California 93065
("EMPLOYER") and DOMINICK SAVO ("EMPLOYEE"),
Section 1.0 - Recitals
1.1 EMPLOYEE has rendered services to EMPLOYER over a period of
many months in various capacities, e.g. just prior to the recent sale of
EMPLOYER, EMPLOYEE was general manager of EMPLOYER.
l.2 EMPLOYEE represents that he has extensive experience and
comprehensive knowledge of the business of EMPLOYER, Based upon EMPLOYEE'S
representation regarding his experience and abilities, EMPLOYER has a
compelling need for his continued association as executive, officer and
director of EMPLOYER. To assure the continued association and services of
EMPLOYEE, to retain and utilize his experience, skills, abilities,
background and knowledge, and to facilitate long-range planning and growth
of the business of EMPLOYER in an orderly and efficient manner, EMPLOYER is
willing to continue to employ EMPLOYEE upon the terms and conditions set
forth hereinafter.
l.3 EMPLOYEE is willing to continue rendering services to EMPLOYER
upon the terms and conditions set forth hereinafter.
l.4 NOW, THEREFORE, in consideration of the foregoing recitals and
of the promises aid conditions herein contained, the parties agree as set
forth below.
Section 2.0 - Employment
2.1 Powers and Duties. EMPLOYEE shall be employed by EMPLOYER
with the following titles: president, chief executive officer and member of
the board of directors of EMPLOYER. EMPLOYEE shall have powers and duties
consistent with such positions including, but not limited to, those related
to or involving the sales and marketing of all products of EMPLOYER within
and without the United States, compliance with any strategic plan and
approved budgetary allocations for EMPLOYER and the hiring and firing all
employees of EMPLOYER.
2.2 Term of Employment. The term of this Agreement and
EMPLOYEE'S employment shall be two (2) years, unless sooner terminated as
a result of the following: (i) retirement of the EMPLOYEE; (ii) death of
EMPLOYEE; (iii) an Involuntary Termination pursuant to a Disabling Event
under Section 6.1; (iv) an Employer Termination For Cause pursuant to
Section 6.2; (v) an Employer Termination For Cause pursuant to Section 6.3;
(vi) an Employer Termination Without Cause pursuant to Section 6.4 or (vii)
a Voluntary Termination pursuant to Section 6.5. The initial and any
subsequent term of this Agreement shall be automatically renewed for a
period of one year unless EMPLOYEE notifies EMPLOYER, or EMPLOYER notifies
EMPLOYEE, in writing at least 30 days prior' to expiration of the then
current term of this Agreement that the Agreement shall not be renewed.
2.3 Time to be Devoted to Employment. Except for annual vacations
taken pursuant to Section 4.1 and absences due to temporary illness as
contemplated by Section 4.2 during the employment term EMPLOYEE shall devote
his full time and energy to the business of EMPLOYER. EMPLOYEE shall not be
engaged in any other business activity which, in the reasonable judgment of
the Board of Directors of EMPLOYER, conflicts with the duties of EMPLOYEE
hereunder, whether or not such activity is pursued for gain, profit or other
pecuniary advantage; provided, however, that EMPLOYEE may, without violating
the provisions of this Section 2.3 own less than 5% of the outstanding
capital stock of a company whose shares are actively traded on a public
securities exchange or a public over-the-counter market.
Section 3.0 - Compensation of EMPLOYEE
3.1 Annual Salary. As compensation for the services to be
performed hereunder, EMPLOYEE shall receive a salary at the rate of One
Hundred Twenty Thousand Dollars ($120,,000) per annum, payable in equal
weekly installments ("Regular Compensation") which shall be adjusted semi
annually for any change upward from the preceding semi-annual period in the
cost-of-living index for the Los Angeles/Long Beach region as compiled by the
United States Department of Labor (the "semi-annual COLA").
3.2 Salary Reviews. In addition to the adjustments provided for
in Section 3.1 EMPLOYEE shall receive annual merit reviews and such salary
increases, if any, as may be determined by the non-employee members of the
Board of Directors of EMPLOYER at its annual meeting.
3.3 Salary Continuation During Disability. - If EMPLOYEE for any
reason whatsoever suffers a Disabling Event (defined in Section 6.1) during
the term of his employment, EMPLOYER agrees that, if EMPLOYEE is
involuntarily terminated pursuant to Section 6.11 it will pay EMPLOYEE an
amount equal to seventy percent (70%) of the Regular Compensation he is
receiving at the time of occurrence of the Disabling Event, payable as set
forth above. Such payment shall be increased semi-annually by COLA and shall
continue for so long as EMPLOYEE is disabled and thereafter until the earlier
of the following events occurs: (i) EMPLOYEE is rehired by EMPLOYER for a
salary and executive position at least equal to his executive position and his
Regular Compensation at the time of occurrence of the Disabling Event plus
accrued semi-annual COLA, or (ii) the second anniversary date of the Disabling
Event.
3.4 Tax Withholding. EMPLOYER shall have the right to deduct or
withhold, from any amounts of money due EMPLOYEE and/or his spouse, any and
all sums required for federal income and Social Security taxes, together
with all state and local taxes now applicable or that may be enacted and
become applicable in the future.
3.5 Incentive Compensation.
3.5.1 In addition to Regular Compensation, EMPLOYEE shall be
entitled to incentive compensation ("Incentive Compensation") from EMPLOYER,
payable in a lump sum on or before thirty days (30) following each
anniversary date of this Agreement, including its expiration date. EMPLOYER'S
obligation to pay Incentive Compensation shall survive expiration of this
Agreement.
3.5.2 The amount of Incentive Compensation payable to EMPLOYEE
shall be based on the following percentages of the Pretax Earnings (defined
below) of EMPLOYER, determined as of each anniversary date of this Agreement,
for the immediately preceding 12-month period:
3.5.2.1 If Pretax Earnings for the applicable 12-month
period equal or exceed the Projected Pretax Earnings (defined below) for such
12-month period, EMPLOYEE shall receive Incentive Compensation equal to 20% of
EMPLOYEE'S then current annual Regular Compensation, payable as aforesaid.
3.5.2.2 If Pretax Earnings for the applicable 12-month
period exceed the Projected Pretax Earnings (defined below) for such 12-month
period by 20% or more, EMPLOYEE shall receive additional Incentive Compensation
(in addition to the Incentive Compensation payable under Section 3.5.2.1 above)]
equal to 20% of EMPLOYEE'S then current annual Regular Compensation, payable
as aforesaid.
3.5.3 "Pretax Earnings" means the pretax earnings of the EMPLOYER
in whatever form the businesses of EMPLOYER may be conducted [including, without
limitation, as a subsidiary or subsidiaries, as a division or divisions, or as
part of a subsidiary or division of any current or future parent of EMPLOYER, or
any subsidiary or affiliate thereof (collectively, "Parent Company")],
determined in accordance with generally accepted accounting principles
consistently applied, except that solely for the purpose of such definition (i)
no deduction shall be made for federal, state or local income or excise taxes;
(ii) no deduction shall be made for Parent Company head office or corporate
charges, other than charges for specific necessary services supplied at fair
market value; (iii) no deduction shall be made for amortization of goodwill;
(iv) no deduction for interest on funds advanced by the Parent Company shall be
made for any fiscal period, other than interest (at not greater than the then
fair market rate) on funds advanced by the Parent Company at the request of
EMPLOYEE for operating capital; (v) a net loss incurred for any fiscal period
shall not be carried back to offset earnings for any prior fiscal period, but
it shall be carried forward to offset pretax earnings for subsequent fiscal
periods until such net loss is depleted; (vi) no deduction shall be made for
management fees paid by EMPLOYER to the Parent Company, provided that this
clause shall not be deemed to prevent the deduction of head office or corporate
charges subject to the limitation specified in clause (ii); and (vii) no
deduction shall be made for any dividend or redemption payments.
3.5.4 "Projected Pretax Earnings" means the Pretax Earnings projected
in a EMPLOYER budget approved by EMPLOYEE and EMPLOYER.
3.5.5 Past due Incentive Compensation shall earn interest at the
rate of 10% per annum, compounded daily, until paid.
Section 4.0 - Employee Benefits
4.1 Annual Vacation. EMPLOYEE shall be entitled to three (3) weeks
vacation time each year without loss of compensation. If EMPLOYEE is unable for
any reason to take the total amount of vacation time authorized herein during
any year, he may elect to do either or both of the following: (i) accrue the
unused time and add it to vacation time for the following year provided the
number of vacation days accrued may not result in EMPLOYEE being entitled to
more than four (4) weeks vacation time for that following year and/or (ii)
receive a cash payment for all or such part thereof not accrued as aforesaid in
an amount equal to the amount of Regular Compensation attributable to that
period of time. If EMPLOYEE fails to make an election by notice to EMPLOYER
prior to the end of such following year, he shall be deemed to have elected a
cash payment as provided in clause (ii) above for all unused time, and EMPLOYER
shall deliver the payment to EMPLOYEE within thirty (30) days following the end
of such following year.
4.2 Illness. EMPLOYEE shall be entitled to sick leave of one (1)
day per month during the employment term. Sick leave may be accumulated or
EMPLOYEE may receive a cash payment therefor in an amount equal to the amount
of Regular Compensationa attributable to that period of time, such payment to
be made according to the procedure for annual vacation time provided in
Section 4.1.
4.3 Automobile Allowance. Within ten (10) days following the
beginning of each month during the term of this Agreement, EMPLOYER shall pay
EMPLOYEE the sum of Seven Hundred Dollars ($700.00) as an automobile allowance.
Such sum shall be increased within thirty (30) days following the January 1 of
each fourth calendar year during the term of EMPLOYEE'S employment to reflect
the semi-annual COLA.
4.4 Contributory Savings Plan. EMPLOYEE shall continue to be
entitled to be a participant in any EMPLOYER savings plan established under
Section 401(k) of the Internal Revenue Code.
4.5 Medical, Etc., Insurance Coverage. EMPLOYER agrees to include
EMPLOYEE, and those of his children who qualify as EMPLOYEE'S dependents
under Section 152 of the Internal Revenue Code, in the coverage of all of
EMPLOYER'S medical, hospital, surgical, dental and other group health and
accident insurance plan(s).
4.6 Death Benefits. If EMPLOYEE should die during the employment
term, EMPLOYER agrees to pay the premiums upon the health and dental
insurance of EMPLOYER to which EMPLOYER'S dependents are then entitled to
subscribe under the Consolidated omnibus Reconciliation Act of 1986 ("Cobra");
such premium payments by EMPLOYER shall continue for the extension period of
thirty-six (36) months following the death of EMPLOYEE.
4.7 Split Dollar Life Insurance.
4.7.1 If at any time during the term of this Agreement the
Pretax Earnings (as defined in Section 3.5.3) exceed the Projected Pretax
Earnings (as defined in Section 3.5.4) by $50,000 or more, EMPLOYER shall
obtain and maintain a whole-life or universal life insurance policy on the life
of EMPLOYEE having a death benefit of Five Hundred Thousand Dollars ($500,000)
payable to the beneficiary or beneficiaries designated by EMPLOYEE.
EMPLOYER further agrees to pay all premiums on the policy during EMPLOYEE'S
employment term.
4.7.2 Title and ownership of the policy shall reside in EMPLOYER
for its use and for the use of EMPLOYEE all in accordance with this Agreement,
EMPLOYER alone may, to the extent of its interest, exercise the right to borrow
on the policy.
4.7.3 EMPLOYEE (or his assignee) shall have the right and power
to designate a beneficiary or beneficiaries to receive proceeds payable on his
death and to elect and change a payment option for such beneficiaries, but
subject always to any right or interest EMPLOYER may have in such proceeds as
provided herein.
4.7.4 Premiums shall be paid upon each premium due date
specified by the policy. If either EMPLOYER fails to fulfill the obligation
to pay premiums under this Section 4.7.4. EMPLOYEE may assume such obligation,
in which event the rights of the parties hereunder shall be altered in the
manner described in Section 4.7.8.
4.7.5 Where premiums are paid in strict accordance with Section
4.7.4 or when EMPLOYEE'S death occurs before the end of the grace period for
any premium in default, death proceeds of the policy shall be divided as
follows: EMPLOYER shall be entitled to an amount equal to the policy's tabular
cash value determined as of the date to which premiums are paid, plus any
outstanding dividend accumulations or the cash value of any paid-up additions
and any postmortem dividend, less any indebtedness to be determined as of the
date of death, The beneficiaries designated by EMPLOYEE shall be entitled to
the remainder of such proceeds. EMPLOYER and EMPLOYEE (or his assignee) shall
share in any interest due on the death proceeds as their respective share of the
proceeds bears to the total proceeds, excluding any such interest.
4.7.6 Where there is a refund of unearned premium as provided
in the contract of insurance, any refund shall be apportioned as follows:
4.7.6.1 Where EMPLOYEE (or his assignee) has contributed
to the policy premium at the last required premium interval, the refund of
unearned premiums shall be divided between EMPLOYER and EMPLOYEE (or his
assignee) as their respective share of the premium payment obligation bears
to the total required for such interval.
4.7.6.2 Where EMPLOYEE (or his assignee) has not
contributed to the premium at the last required premium interval, the refund
of unearned premium shall be refunded in total to EMPLOYER.
4.7.7 When premiums are paid in strict accordance with Section
4.7.4 and where surrender occurs not later than sixty (60) days after due date
of any premium in default, the net cash surrender value of the policy shall be
distributed as follows: EMPLOYER shall be entitled to an amount equal to the
policy's tabular cash value, plus any outstanding dividend accumulations or
cash value of any paid-up additions, less any indebtedness against, the policy,
such cash values, accumulations, and cash value of paid-up additions and
indebtedness to be determined as of the date of surrender.
4.7.8 Where premiums are not paid in strict accordance with
Section 4.7.4 death proceeds or net cash value of the policy shall be divided
as follows:
4.7.8.1 If EMPLOYER pays less in the aggregate than its
share of the premiums specified in Section 4.7.4. EMPLOYER'S share of death
proceeds or of the net cash value of the policy on surrender shall be decreased
within the limits of such proceeds or net cash value, as the case may be, by
the total amount of such decreased premiums. EMPLOYER'S (or his assignees)
designated beneficiary, in the event of death, and EMPLOYEE (or his assignee)
in the event of surrender, shall be entitled to any remainder of proceeds or
net cash value, as thecase may be.
4.7.8.2 If EMPLOYER pays more in the aggregate than the
share of premiums specified in Section 4.7.4. EMPLOYER'S share of death
proceeds or of the net cash value of the policy on surrender shall be increased
within the limits of such proceeds or net cash value, as the case may be, by
the total amount of such increased premiums to the extent that such increased
share does not exceed the sum of EMPLOYERTS premiums paid, EMPLOYEE'S (or his
assignees) designated beneficiary, in the event of death, and EMPLOYEE (or his
assignee) in the event of surrender, shall be entitled to any remainder of
proceeds or net cash value, as the case may be.
4.7.9 EMPLOYER'S share of death proceeds payable on EMPLOYEE'S
death while the policy is in force under any of its nonforfeiture provisions
shall be an amount equal to the excess, if any, of EMPLOYER'S share of the
polices net cash value at the date of default in premium payment (such share
determined in the manner prescribed in Sections 4.7.5 or 4.7.8 in relation to
the facts presented) over any indebtedness against the policy at EMPLOYEE'S
death. The designated beneficiary(s) shall be entitled to any remainder of
such proceeds.
4.7.10 EMPLOYER'S share of the net cash value payable on
surrender of the policy while it is in force under any of its non-forfeiture
provisions shall be an amount equal to the lesser of the net cash value at
date of surrender or (ii) the excess, if any, of EMPLOYER'S share of the
policy's net cash value at the date of default in premium (such share determined
in the manner prescribed in Sections 4.7.7, 4.7.8 or 4.7.9 in relation to the
facts presented), over any indebtedness on the policy at the date of surrender,
EMPLOYEE (or his assignee) shall be entitled to any remainder of such net cash
value.
4.7.11 If the policy contains a premium waiver provision, any
premium waived shall be considered for all purposes of this Agreement as having
been paid by EMPLOYER.
4.8 Key-Man Insurance. In addition to the insurance required under
Section 4.7. EMPLOYER may, at its election and for its benefit, purchase
"key-man" insurance insuring EMPLOYEE against accidental loss or death,
EMPLOYEE shall submit to such physical examination and supply such information
as may be required in connection therewith.
4.9 Miscellaneous.
4.9.1 It is understood and agreed that the services required by
EMPLOYER will require EMPLOYEE to incur entertainment expenses during the
employment term on behalf of EMPLOYER. EMPLOYER shall make available to
EMPLOYEE sufficient funds for this purpose at such times as EMPLOYEE shall
request. In each instance, EMPLOYEE shall furnish to EMPLOYER adequate
records and other documentary evidence required by federal and state (or
their equivalents) statutes and regulations for the substantiation of each such
expenditure as an income tax deduction.
4.9.2 During the employment term EMPLOYER shall pay all
reasonable dues and fees necessary to maintain EMPLOYEE'S membership in such
professional organizations as EMPLOYEE may reasonably select.
4.9.3 In addition to the foregoing specifically provided
benefits, EMPLOYEE shall be entitled to and shall receive during the employment
term all other benefits and conditions of employment generally available to
full-time salaried employees of EMPLOYER.
Section 5.0 - Business Expenses
5.1 Use of Credit Card, All business expenses reasonably incurred by
EMPLOYEE in promoting the business of EMPLOYER, including but not limited to
expenditures for entertainment, gifts, and travel, shall be paid for, insofar
as is, reasonably possible, by the use of credit cards in the name of an
EMPLOYER and furnished to EMPLOYEE.
5.2 Reimbursement of Other Business Expenses.
5.2.l EMPLOYER shall promptly reimburse EMPLOYEE for all other
reasonable business expenditures reasonably incurred by EMPLOYEE in connection
with the business of EMPLOYER.
5.2.2 Each such expenditure shall be reimbursable only if it is
of a nature qualifying it as a proper deduction on the federal and state income
tax return of the applicable EMPLOYER.
Section 6.0 - Termination of the Agreement
6.1 Involuntary Termination. If EMPLOYEE for any reason whatsoever
becomes permanently incapacitated or disabled so that he is mentally or
physically incapable of performing the duties prescribed herein for a period of
(i) three (3) months or longer (defined as a "Disabling Event"), EMPLOYER may,
at that time or at any time thereafter, at its option, terminate the employment
of EMPLOYEE under this Agreement immediately upon giving him notice to that
effect (such termination and (i) a termination by operation of clause (ii) of
Section 2.2 being hereinafter called "Involuntary Termination"), An Involuntary
Termination under this Section 6,1 (for a Disabling Event) shall be subject to
the provisions of Section 3.3.
6.2. EMPLOYER Termination f or cause EMPLOYER may, with the approval
of its Boards of Directors, terminate the employment of EMPLOYEE hereunder at
any time during the employment tern for "cause" (such termination being herein
called a "EMPLOYER Termination for Cause") by giving EMPLOYEE written notice of
such termination, which shall be effective no sooner than sixty (60) days after
delivery of the notice to EMPLOYEE provided, however, that EMPLOYER may relieve
EMPLOYEE from the obligation to perform his duties during such sixty (60) days
after delivery of the notice. For the purposes of this Section 6.2. "cause"
means (i) EMPLOYEE'S willful and substantial misconduct with respect to the
business and affairs of EMPLOYER; (ii) the commission by EMPLOYEE of
embezzlement, fraud, or other like crime involving money or other property of
EMPLOYER; or (iii) EMPLOYEE'S material breach of an expressly stated material
obligation under this Agreement; and (iv) EMPLOYEE'S failure to cure the same
to EMPLOYER'S reasonable satisfaction within sixty (60) days after receiving
notice from EMPLOYER specifying the grounds upon which EMPLOYER seeks to
terminate the employment of EMPLOYEE.
6.3 EMPLOYEE Termination For Cause. EMPLOYEE may terminate this
Agreement at any time during the employment term for "cause" (such termination
being, herein called an "EMPLOYEE Termination for Cause") by giving EMPLOYER
notice of such termination which shall be effective no sooner than sixty (60)
days after delivery of the notice to EMPLOYER provided, however, that EMPLOYER
may relieve EMPLOYEE from the obligation to perform his duties during such
sixty (60) days after delivery of the notice. For the purposes of this Section
6.3 "cause" means material breach by EMPLOYER of one or more of its obligations
under this Agreement.
6.4 EMPLOYER Termination Without Cause. EMPLOYER may, with the
approval of its Board of Directors, terminate the employment of EMPLOYEE
hereunder at any time during the employment term without "cause" (such
termination being herein called an "EMPLOYER Termination Without Cause") by
giving EMPLOYEE notice of such termination which shall be effective immediately
upon delivery of the notice to EMPLOYEE.
6.5 Voluntary Termination. Any termination of the employment of
EMPLOYEE otherwise than as a result of an Involuntary Termination, an EMPLOYER
Termination For Cause, an EMPLOYER Termination Without Cause or an EMPLOYEE
Termination For Cause shall be deemed to be a "Voluntary Termination", A
Voluntary Termination shall be effective as specified in a written notice of
termination provided, however, that EMPLOYER may relieve EMPLOYEE of the
obligation to perform his duties after the delivery of the written notice of
termination.
6.6 Effect of Termination of EMPLOYEE'S Employment.
6.6.1 Upon the termination of EMPLOYEE'S employment hereunder
pursuant to a Voluntary Termination or an EMPLOYER Termination For Cause,
neither EMPLOYEE nor his beneficiary(s) or estate shall have any surviving
rights or claims against any of EMPLOYER except to receive promptly upon
such termination: (i) any unpaid portion of EMPLOYEE'S Regular compensation
provided for in Section 3.1 and Incentive Compensation provided for in Section
3.5 computed on a pro rata basis to the date of termination; (ii) reimbursement
for any expenses for which EMPLOYEE is entitled to reimbursement under this
Agreement and for, which he shall not have received payment; (iii) payment for
any unused annual vacation time and sick leave for which EMPLOYEE has not been
compensated as of the date of termination; (iv) all employee benefits vested in
EMPLOYEE and/or his dependents, including, without limitation, the benefits
specified in Section 7.2 and (v) in the case of an EMPLOYER Termination for
Cause only, payment of an amount equal to the lesser of (x) three (3) months'
of EMPLOYEE'S Regular Compensation or (y) Employee's Regular Compensation for
the remainder of the term of the Agreement, in, each case computed at the
rate in effect on the date of such termination and in each case payable in equal
weekly installments.
6.6.2 Upon the termination of EMPLOYEE'S employment hereunder
pursuant to an Involuntary Termination, neither EMPLOYEE nor his beneficiary(s)
or estate shall have any surviving rights or claims against EMPLOYER except to
receive promptly upon such termination: (i) payments and benefits specified in
Section 6.6.1 and 7.2; (ii) if such Involuntary Termination is due to a
Disabling Event, payments pursuant to Section 3.3; and (iii) if such Involuntary
Termination is due to the death of EMPLOYEE, payment of all death benefits
provided under Sections 4.6 and 4.7.
6.6.3 Upon the termination of EMPLOYEE'S employment under this
Agreement pursuant to an EMPLOYER Termination Without Cause or an EMPLOYEE
Termination For Cause, neither EMPLOYEE nor his beneficiary(s) or estate shall
have any surviving rights or claims against EMPLOYER except benefits specified
in Sections 6.6.1 and 7.2; (ii) payment of an to receive promptly upon such
termination: (i) payments and amount equal to the greater of (x) six (6) months'
of EMPLOYEE'S Regular Compensation or (y) Employee's Regular Compensation for
the remainder of the term of the Agreement, in each case computed at the rate
in effect on the date of such termination and in each case payable in equal
weekly installments; (iii) payment of the premium payments due upon the health
and dental insurance for the entire period to which EMPLOYEE is entitled to
subscribe under Cobra as a result of such termination; and (iv) transfer without
charge to EMPLOYEE of the entire interest, if any, which EMPLOYEE does not own
on the date of such termination in the life insurance policy on EMPLOYEE'S life
provided for in Section 4.7.
Section 7.0 - Stock Bonus Plan
7.1 Stock Purchase Agreement.
7.1.1 Upon execution of this Agreement, EMPLOYER shall issue
and sell one thousand eight hundred eighty eight (1188) shares of its common
stock, representing twenty percent (20%) of EMPLOYER'S outstanding shares after
issuance, to EMPLOYEE for the sum of $20,000, payable in immediately available
funds.
7.2 Restricted Stock Option.
7.2.1 EMPLOYER hereby grants EMPLOYEE the option to purchase
additional shares of its common stock, exercisable on and after each anniversary
date of this Agreement and any extensions thereof (each such anniversary date
being hereinafter referred to as "Exercise Date"), at a price equal to 75% of
its fair market value on the Exercise Date ("Option").
7.2.2 The number of shares subject to the Option on each
Exercise Date shall be determined by dividing 40% of EMPLOYEE'S Regular
Compensation on the applicable Exercise Date by the exercise price. For
example, if EMPLOYEE'S Regular Compensation is $100,000 per annum on the first
anniversary date of this Agreement (i.e., the first Exercise Date), the number
of shares subject to the Option vesting on such anniversary date would
determined by dividing 40,000 (40% of $100,000) by the then fair market per
share value of EMPLOYER'S shares. If the fair market value is $1.00 per share,
the maximum number of shares subject to such option would be 40,000 shares.
7.2.3 The Option shall be exercisable as to the shares optioned
on the applicable Exercise Date for a period of ten 10) years following such
Exercise Date.
7.2.4 If EMPLOYEE'S employment by EMPLOYER is terminated for
any reason, only that portion of the Option exercisable at the time of such
termination of employment may thereafter be exercised by EMPLOYEE or, in the
case of termination by EMPLOYER'S death, by EMPLOYEE'S legal representative(s).
7.2.5 The Option is not intended to be and shall not be treated
as an incentive stock option under Section 4.2.2 of the Internal Revenue Code
unless this sentence has been manually lined out and its deletion is followed
by the signature of a corporate officer of EMPLOYER and EMPLOYEE.
/s/
__________________________
EMPLOYER Officer signature
/s/
__________________________
EMPLOYEE Signature
If the parties elect to treat the option as an incentive stock option under
Section 4.2.2 as herein provided, the Option shall be subject to, and EMPLOYER
and EMPLOYEE agree to be bound by, all of the terms and conditions of the
EMPLOYER stock option plan to which the Option shall be subject, as the same
may be amended from time to time in accordance with the terms thereof, provided
no such amendment shall deprive EMPLOYEE of the option or any of his rights
hereunder.
7.2.6 EMPLOYEE may not transfer the Option except by will or
the laws of descent and distribution. The Option shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise, and shall be exercisable during EMPLOYEE'S
lifetime only by EMPLOYEE or his guardian or legal representative.
7.3 Piggyback Registration and Preemptive Rights.
7.3.1 For purposes of this Section 7.3 the following terms shall
have the following meanings:
7.3.1.1 "Shares" shall mean those shares of common stock
of EMPLOYER acquired by EMPLOYEE pursuant to the option or otherwise.
7.3.1.2 "Holder" shall mean any person or entity holding
Shares, including EMPLOYEE.
7.3.1.3 "Registration Expenses" shall mean all expenses,
except Selling Expenses as defined below, incurred by the EMPLOYER in complying
with Section 7.3.2 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the EMPLOYER, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the EMPLOYER which shall
be paid in any event by EMPLOYER) and the reasonable fees and disbursements of
one counsel for all Holders.
7.3.1.4 "Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to the
securities registered by the Holders and, except as set forth in the definition
of Registration Expenses, all reasonable fees and disbursements of counsel for
any Holder.
7.3.2 If the EMPLOYER shall determine to register any of its
securities, whether pursuant to an underwriting or not, either for its own
account or the account of a security holder or holders, other than a
registration relating solely to employee benefit plans, EMPLOYER will (i)
promptly give to each Holder written notice thereof; and (ii) include in such
initial registration only (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved wherein, all the Shares of
each Holder specified in a written request or requests, made within 20 days
after receipt of such written notice from the EMPLOYER, by any Holder.
7.3.3 If the registration of which EMPLOYER gives notice is for
a registered public offering involving an underwriting, EMPLOYER shall so advise
the Holders in writing. In such event, the right of any Holder to registration
pursuant to Section 7.3.2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Shares in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Shares through such underwriting shall (together with the EMPLOYER and
any other shareholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the EMPLOYER. Notwithstanding
any other provision of this Section 7.3.3 if the managing underwriter in good
faith determines that marketing factors require a limitation of the number of
shares to be underwritten, the managing underwriter may limit the Shares to be
included in such registration, but only in proportion to the limits imposed on
the number of other issued and outstanding shares to be included in the
registration. EMPLOYER shall so advise all Holders and the number of Shares
that may be included in the registration and underwriting shall be allocated
among all Holders in proportion, as nearly as practicable, to the respective
amounts of Shares held by such holders at the time of filing the registration
statement. To facilitate the allocation of shares in accordance with the above
provisions, EMPLOYER may round the number of shares allocated to any Holder or
other shareholder to the nearest 100 shares. If any Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to EMPLOYER and the managing underwriter. Any Shares excluded or
withdrawn from such underwriting shall be withdrawn from such registration and
shall not be transferred in a public distribution prior to 90 days after the
effective date of the registration statement relating thereto, or such other
shorter period of time as the underwriters may require.
7.3.4 All Registration Expenses incurred in connection with
(i) a registration pursuant to Section 7.3.2 shall be borne by the EMPLOYER.
Unless otherwise stated, all Selling Expenses relating to Shares registered on
behalf of the Holders shall be borne by the Holders of such securities pro rata
on the basis of the number of Shares so registered.
7.3.5 In the case of a registration, qualification or
compliance effected by the EMPLOYER pursuant to Section 7.3.2. EMPLOYER will
keep each Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof.
7. 4
7.4.1 EMPLOYEE shall have full preemptive or preferential
rights, as defined by law, to subscribe for or purchase his proportional part
of any shares that may be issued at any time by EMPLOYER, EMPLOYER'S articles
of incorporation shall be amended to include such preemptive and preferential
rights, EMPLOYER shall notify EMPLOYEE in writing at least sixty (60) days
prior to any issuance of EMPLOYER'S shares, Such notice shall be accompanied by
the subscription agreement, if any, and shall specify the date of the
contemplated issuance, the identity of the subscriber(s) for the shares, total
number of shares to be issued to such subscribers, the price per share and the
total number of shares of such issuance EMPLOYEE is entitled to purchase
pursuant to EMPLOYER'S preemptive and preferrential rights. At any time prior
to the date of issuance specified in the notice, EMPLOYEE may purchase all or
any portion of the shares EMPLOYEE is entitled to purchase by delivering to
EMPLOYER the subscription agreement, if any, signed by EMPLOYEE and the
consideration specified in the notice.
7.4.2 If the outstanding shares of the class then subject to
the Option are increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities, as a result of one or more
reorganizations, recapitalizations, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustments shall be made in the number
and/or kind of shares or securities for which the unexercised portions of the
Option may thereafter be exercised, all without any change in the aggregate
exercise price applicable to the unexercised portions of the Option, but with a
corresponding adjustment in the exercise price per share or other unit. No
fractional share of stock shall be issued under the Option or in connection
with any such adjustment.
7.4.3 EMPLOYER shall not, by amendment to its articles of
incorporation or through any reorganization, sale of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
option, but will at all times in good faith assist in the carrying out of
all such terms. Without limiting the generality of the foregoing, EMPLOYER
will not (i) issue any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or involuntary
dissolution or (ii) transfer all or substantially all of its properties and
assets to any other person (corporate or otherwise), or consolidate with or
merge into any other person or permit any such person to consolidate with or
merge into EMPLOYER (if EMPLOYER is not the surviving person) unless such
other person shall expressly assume in writing and will be bound by all the
terms of the option.
7.5 Treatment of Shares upon Acquisition of EMPLOYER.
7.5.1 If EMPLOYER is acquired by a publicly-traded company,
EMPLOYEE shall have the continuing right to exchange his Shares (including
those held by him as of the acquisition and any issued in the future under the
option) for registered stock of the acquiring company having an equivalent
market value on the date of the exchange.
7.5.2 Subject to the provisions of paragraph 7.3 if any current
or future parent of EMPLOYER shall determine to register any of its securities,
whether pursuant to an underwriting or not, either for its own account or the
account of a security holder or holders, other than a registration relating
solely to employee benefit plans, EMPLOYEE shall have the right to participate
in such registration through an exchange of his shares (on an equivalent market
value basis) for registrable shares in such parent.
8.0 General Provisions
8.1 Notices. Notices and other communications among the parties
shall be in writing and shall be delivered personally or sent by air courier
or first class certified or registered mail, return receipt requested and
postage prepaid, addressed as follows:
If to EMPLOYEE:
Mr. Dominick Savo
12021 Pradera Road
Camarillo, California 93012
If to EMPLOYER:
Assembly and Manufacturing Systems, Inc.
2222 Shasta Way,
Simi Valley, California 93065
Attention: Mr. Lee Brukman
Chairman
All notices and other communications given to any party in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of
delivery if personally delivered; on the business day after the date when sent
if sent by air courier; and on the third business day after the date when sent
if sent by mail, in each case addressed to such party as provided in this
Section 8.1 or in accordance with the latest unrevoked direction from such
party.
8.2 Binding Agreement; Benefit. The provisions of this Agreement
will be binding upon, and will inure to the benefit of, the respective heirs,
representatives, assigns and successors of the parties.
8.3 Governing Laws This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California,
USA.
8.4 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement by any other party(s) must be in writing and shall
not operate or be construed as a waiver of any subsequent breach by such other
party(s).
8.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.6 EMPLOYEE Liability to EMPLOYER. EMPLOYEE shall not be liable
to EMPLOYER for any action taken or omitted to be taken by him except in the
case of his own failure to exercise the care, skill, prudence prevailing that
skill, prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use
in the conduct of a company with similar purposes.
8.7 Indemnification of EMPLOYEE, To the extent not expressly
prohibited by applicable law, and regardless of whether or not EMPLOYEE succeeds
on the merits of any litigation, EMPLOYER, jointly and severally, shall defend,
EMPLOYEE from any and all costs, indemnify and hold harmless expenses, damages,
claims, liabilities and judgments (including the reasonable costs of the defense
of any claim or action and any sums which may be paid with the consent of
EMPLOYER in settlement thereof) which may be incurred by or awarded against
EMPLOYEE, by reason of any action taken or omitted to be taken on behalf of
EMPLOYER or in furtherance of its interest. EMPLOYEE shall not be entitled to
claim any indemnity or reimbursement under this Section 8.7 to the extent the
same is in respect of any cost, expense, damage or claim that may be incurred
by EMPLOYEE which results from the failure of EMPLOYEE to act in accordance with
the provisions of this Agreement and the "prudent man" standard of care set
forth in Section 8.6. To the extent permitted by applicable law, EMPLOYER shall
make prompt payment of litigation expenses at the request of EMPLOYEE in advance
of payment of indemnification. In defending any appeal by EMPLOYEE of a
determination that EMPLOYEE has not met the requisite standard of conduct
required for indemnification under this Section 8.8. EMPLOYER shall be
required to prove under applicable standards of proof that EMPLOYEE has not met
such standard of conduct in order to prevail,
8.8 Assignment. This Agreement is personal in its nature and no
party shall, without the consent of all the others, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that the
provisions hereof shall inure to the benefit of, and be binding upon (i) each
successor of any of the corporate parties, whether by merger, consolidation,
transfer of all or substantially all assets, or otherwise and (ii) the heirs
and legal representatives of EMPLOYEE.
8.9 Section Headings and Cross-References. The section headings
contained in this Agreement are for convenience only and will not be construed
as part of this Agreement. Cross-references to section numbers in this Agreement
shall be construed to refer only to the sections of this Agreement and not to
the sections of any exhibit incorporated into or referred to herein, unless
expressly indicated otherwise,
8.10 Amendments. No amendments or additions to this Agreement shall
be binding unless reduced to writing and signed by all the parties, except as
otherwise may be specifically provided herein.
9.0 Covenant Not To Compete During the term hereof, EMPLOYEE shall
not compete, directly or indirectly, with EMPLOYER, or interfere with,
solicit, disrupt or attempt to disrupt the relationship, contractual or
otherwise, between the EMPLOYER and any customer, client, supplier, consultant
or employee of the EMPLOYER. An activity competitive with an activity engaged
in by EMPLOYER shall include becoming an employee, officer, consultant or
director of, or being an investor in, lender to, or owner of, an entity or
person engaged in the business then engaged in by the EMPLOYER.
10.0 Confidential Information. EMPLOYEE recognizes and acknowledges
that EMPLOYER'S trade secrets and proprietary information and processes, as
they may exist from time to time, are valuable, special and unique assets of
EMPLOYER's business, access to and knowledge of which are essential to the
performance of EMPLOYEE's duties hereunder. EMPLOYEE will not, in whole or
in part, disclose such secrets, information or processes to any persons
(legal or natural), firm, corporation, association or other entity for any
reasons or purpose whatsoever, nor shall EMPLOYEE make use of any such property
for his own purposes or for the benefit of any person, firm, corporation or
other entity (except the EMPLOYER) under any circumstances, provided that these
restrictions shall not apply to such secrets, information and processes which
are then in the public domain (provided that EMPLOYEE was not responsible,
directly or indirectly, for such secrets, information or processes entering the
public domain without EMPLOYER's consent), EMPLOYEE agrees to hold as EMPLOYER'S
property, all memoranda, books, papers, letters, formulas and other data, and
all copies thereof and therefrom, in any way relating to EMPLOYER's business
and affairs, whether made by him or otherwise coming into his possession, and
on termination or expiration of his employment to deliver all of the same
(including all copies) to the EMPLOYER.
IN WITNESS WHEREOF the parties hereto have entered into and made effective this
Agreement as of the day and year first above written,
" EMPLOYER"
ASSEMBLY AND MANUFACTURING SYSTEMS, INC.
/s/Lee Brukman
By: __________________
Its:____________________
"EMPLOYEE"
/s/
----------------------------------
DOMINICK SAVO
Exhibit 4.25
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment is made and entered into as of October 31, 1995 by and
between Assembly and Manufacturing Systems Inc. ("AMS"), and Dominick Savo
("Employee").
For good and adequate consideration, receipt of which is hereby acknowledged,
that certain Employment Agreement between AMS and Employee, dated as of
April 1, 1995, is hereby amended by the addition of a clause 3.5.6, as follows:
"3.5.6. As additional incentive compensation, such warrants to purchase the
common stock of AMS' parent, SGI International, a Utah Corporation (ASGI@),
upon such terms and conditions as the SGI Board of Directors shall determine,
in its sole discretion."
Employee Employer
AMS
/s/ /s/
By: ------------------ ---------------------------
Dominick Savo Joseph A. Savoca, Chairman
Exhibit 4.25.1
CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into as of September 19, 1995, by and
between Ebbe Skov, 25652 Santo Drive, Mission Viejo, CA 92691 ("CONSULTANT")
and SGI INTERNATIONAL, a Utah corporation, 1200 Prospect Street, Suite 325,
La Jolla, California 92037 ("COMPANY").
WITNESSETH that: COMPANY agrees to retain CONSULTANT and CONSULTANT agrees
to serve as a consultant to COMPANY upon the following terms and conditions:
1. Independent Contractor: CONSULTANT shall have sole discretion as to
the manner in which the consulting services performed hereunder are carried
out and shall be an independent contractor and not an agent or employee of
COMPANY.
2. Technical and/or Marketing Consulting Services: CONSULTANT shall
provide technical and/or marketing consulting services at such time as
COMPANY may from time to time reasonably designate, with due regard for
other obligations of the CONSULTANT, on a project-by-project basis, for a
consulting fee of $500.00 per day plus expenses, except as otherwise
expressly agreed in writing.
3. Advance Estimates: Upon the request of the COMPANY, CONSULTANT shall
without cost to COMPANY, provide an advance estimate which shall state:
(a) The estimated total cost of consulting services and expenses for such
project.
(b) The estimated completion date for the performance of such services and
a not-to-exceed final completion date, assuming no scope changes in the
meantime.
4. Project Definition: Upon receipt of such advance estimates by COMPANY,
COMPANY and CONSULTANT shall cooperate in defining the project, payments,
times and all other provisions related to the performance of services by
CONSULTANT with respect to such project, and shall enter into a supplemental
letter agreement specifying the same.
5. Advance Authorization: COMPANY shall have no obligation to pay any
fees, costs or expenses not authorized in writing by COMPANY before such
fees, costs or expenses are incurred.
6. Records: CONSULTANT shall provide statements for services, fees and
costs according to generally accepted accounting standards in sufficient
detail to satisfy all state and federal taxing authorities.
7. Term: This AGREEMENT shall commence on September 19, 1995, and shall
continue until September 18, 1996, unless extended by mutual agreement.
Either party may terminate this AGREEMENT upon thirty (30) days prior written
notice.
8. Enforcement: In the event of any litigation to enforce or interpret
any provision of this Agreement, a court of competent jurisdiction may award
either party reasonable attorneys fees and costs, in addition to any other
appropriate relief.
9. Confidentiality Agreement: This AGREEMENT includes a Confidentiality
Agreement which is attached hereto and made a part hereof.
IN WITNESS WHEREOF, this AGREEMENT is executed as of the day and year first
written above.
SGI INTERNATIONAL Ebbe Skov
By: /s/ /s/
===================== ================
Joseph A. Savoca
Exhibit 4.26
First Amendment to Consulting Agreement
This First Amendment to the Consulting Agreement ("First Amendment") is made
effective as of January 1, 1996 (the "Effective Date"), by and between SGI
International, a Utah corporation ("SGI") and Ebbe Skov ("Consultant").
Recitals
A. Consultant and SGI entered into a Consulting Agreement (the "Agreement")
on September 19, 1995.
B. Consultant and SGI have orally agreed shortly after the date of the
Agreement that payments to Consultant shall be paid half in stock and half
in cash.
C. The parties hereto desire to amend the Agreement to conform it to their
present practice.
NOW, THEREFORE, the parties agree as follows:
1. Payment for Services.
a. Consulting Fee. SGI agrees to pay Consultant for his services (the
"Services") at the rate of one hundred dollars ($100.00) per hour. The
compensation shall be prorated between payment in cash and in stock as
described herein. Fifty percent (50%) of each month's payment shall be paid
in cash and the remainder shall be paid in stock. The amount of stock shall
be determined by dividing the amount to be paid in stock by the closing bid
price of SGI common stock as of the date of the invoice submitted by
Consultant. Consultant shall be paid by SGI within fifteen (15) days of
receipt of an acceptable invoice from Consultant.
b. Expenses. Consultant shall be reimbursed for reasonable expenses,
including, but not limited to, travel, long distance telephone charges, and
mileage at the rate of $.30 a mile for all business travel.
c. Invoices. Consultant shall invoice SGI monthly for Services
rendered during each month. The invoice will describe the work performed
during such period, set out the hours of work by day and by task, and reflect
the amount and details of any expenses. Consultant agrees that SGI may audit
the billing and expense documentation for a period of one year from the date
of the invoice submittal. All invoices will be paid as described above.
2. Ownership. Consultant agrees that SGI is the owner of all right, title
and interest in the technical information and data (the "Technical Information")
relating to the processing of oil, resid and other carbonaceous material and
oil materials, and to the drying, cleaning and other processing of coal,
bitumen, crude as well as any developments or improvement related thereto,
and as well as any related process control technology, computational
techniques or related trade secrets or intellectual property. SGI shall
also own all other related material used by, developed for, or paid for, by
it in connection with the performance of any Services provided by Consultant
before or after the date set forth above.
3. Confidentially and Disclosure.
a. Disclosure. Consultant desires to have the Technical Information
disclosed to him to enable him to render the Services to SGI, including but not
limited to, the following: evaluation and development of SGI's OCET
Technology, which can be used, among other things, for precipitating asphaltines
out of Resid and for converting bitumens and heavy oils to clean solid fuels,
transportation fuels, light distillates, and other uses. SGI is prepared to
make such Technical Information as it deems necessary available to Consultant
for the aforesaid purpose on the following understanding:
For the purpose of the Agreement:
The term "Technical Information" shall not include any information which:
(i) is "publicly available" information. The phrase" publicly available"
information shall mean readily accessible to the public in written publication,
and shall not include information which is only available by a substantial
searching of the published literature, and information the substance of which
must be pieced together from a number of different publications and sources;
(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;
(iii) is received by Consultant without restriction on disclosure from a
third party who is legally in possession of such information and has a right to
reveal the same to Consultant.
(iv) "Affiliate(s)" of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.
(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with
the physical embodiment of the same whether copyrightable or not, related to
SGI's business.
Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit of
others subject to the obligation of Consultant set forth hereinafter.
b. Confidentiality. Consultant agrees to hold the Technical Information
in confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by SGI.
c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, providing Services
to SGI.
4. Developments and Assignment.
a. Developments. Consultant recognizes that Developments have occurred
and/or are expected and likely to occur in the future as the result of the
performance of Consultant's Services, and Consultant covenants and agrees to
hold all Developments as a result of the performance of such Services or based
on SGI's Technical Information in trust for the use and benefit of SGI, and
hereby assigns and agrees to assign all such Developments to SGI.
b. Consultant Disclosure. Consultant shall promptly disclose in writing
to SGI any and all Developments made by Consultant, and or by any members of
his staff, incident to or as a result of the performance of such Services; and
Consultant hereby assigns and agrees to assign all of its right, title and
interest, in all such Developments to SGI. All such Developments shall be
treated as Technical Information of SGI and the obligations of Consultant under
this Agreement shall apply thereto. Consultant further agrees to and does
hereby assign to SGI all right, title and interest in and to the intellectual
property, rights, and processes or techniques embodying the Developments,
including all rights of copyright or rights to patent or use as a trade
secret such Developments, both within the United States and throughout the
world. The obligation of Sections 7 and 8 are continuing and shall survive the
termination of this Agreement.
c. Assignment. Consultant shall execute and/or require his agents,
servants or employees to execute all applications, assignments, or other
instruments of any kind which SGI, at SGI's expense, shall deem proper or
necessary to apply for, obtain and enforce letters patenta and/or copyrights
of the United States or of any foreignc country or otherwise to protect SGI's
interest in such Developments.
d. Retention. Unless otherwise authorized in writing by SGI, all
documents, drawings and writings provided to Consultant by SGI hereunder or
developed by Consultant hereunder, and all copies thereof shall be returned
promptly to SGI upon completion or termination of Services.
5. Limitation of Liability. In no event shall either of the parties hereto
be liable to the other for the payment of any consequential, indirect, or
special damages, including lost profits.
6. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.
7. Entire Agreement and Amendments. This First Amendment and the Agreement,
itself, constitutes the entire understanding and agreement between the parties
relating to the subject matter hereof and supersedes any prior written or oral
understanding or agreement between the parties relating to the subject matter
hereof. This First Amendment and the Agreement shall not be amended, altered,
or supplemented in any way except by an instrument in writing, signed by the
duly authorized representative of the parties, that expressly references this
First Amendment and the Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and in the year first above written.
SGI Consultant
SGI International,
a Utah Corporation Ebbe Skov
/s/ /s/
By: ====================== By: ======================
Joseph A. Savoca
Exhibit 4.26.1
Consulting Agreement
This Consulting Agreement (Agreement) is entered into this 12th day
of July, 1996 (the Effective Date), by and between SGI International,
a Utah corporation (SGI) and Professor Judith Ware (Consultant).
1. Performance by Consultant. Consultant agrees to provide consulting
services (the "Services") relating to the development of the OCET
Technology. Such Services will include consultation relative to the
performance, data, measurement, analysis, and recommendations as to the
development and improvement of the OCET Technology. The Services shall
also include, but not be limited to, advice, assistance, and information
supplied by Consultant, or developed with the use of any of Consultant's
information, equipment, personnel, goods or facilities. The specific
tasks will be agreed to in writing by Dr. Ernest Esztergar or Dr. David
Newman and Consultant.
2. Payment for Services.
a. Consulting Fee. SGI agrees to pay Consultant for the Services at the
rate of eighty five dollars ($85.00) per hour, not to exceed forty billable
hours per week. The compensation shall be prorated between payment in cash
and in stock as described herein. Fifty five dollars per hour of each
month's payment shall be paid in cash and the remainder ($30 per hour)
shall be paid in stock. The amount of stock shall be determined by dividing
the amount to be paid in stock by the closing bid price of SGI common stock
as of the date of the invoice submitted by Consultant. Consultant shall be
paid by SGI within fifteen (15) days of receipt of an acceptable invoice
from Consultant.
b. Expenses. Consultant shall be reimbursed for reasonable expenses,
including, but not limited to, travel, long distance telephone charges, and
mileage at the rate of $.30 a mile for all business travel.
c. Invoices. Consultant shall invoice SGI monthly for Services rendered
during each month. The invoice will describe the work performed during such
period, set out the hours of work by day and by task, and reflect the amount
and details of any expenses. Consultant agrees that SGI may audit the
billing and expense documentation for a period of one year from the date of
the invoice submittal. All invoices will be paid as described above.
3. Personal Service Contract. SGI and Consultant agree that the Services
will be performed personally by Consultant. If the services are not
performed by Consultant, then SGI has the right to terminate this Agreement
immediately.
4. Obligations of SGI. SGI agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required
by Consultant to complete the Services.
5. Term. This Agreement shall be effective and shall continue for a period
for one year. Absent termination in writing by either party within a thirty
day period prior to the end of each one year term, the Agreement shall
continue for an additional one year term.
6. Ownership. Consultant agrees that SGI is the owner of all right, title
and interest in the technical information and data (the "Technical
Information") relating to the processing of oil, resid and other carbonaceous
material and oil materials, and to the drying, cleaning and other processing
of coal, bitumen, crude as well as any developments or improvement related
thereto, and as well as any related process control technology, computational
techniques or related trade secrets or intellectual property. SGI shall also
own all other related material used by, developed for, or paid for, by it in
connection with the performance of any Services provided by Consultant before
or after the date set forth above.
7. Confidentially and Disclosure.
a. Disclosure. Consultant desires to have the Technical Information
disclosed to him to enable him to render the Services to SGI, including but
not limited to, the following: evaluation and development of SGI's OCET
Technology, which can be used, among other things, for precipitating
asphaltenes out of Resid and for converting bitumens and heavy oils to clean
solid fuels, transportation fuels, light distillates, and other uses. SGI
is prepared to make such Technical Information as it deems necessary
available to Consultant for the aforesaid purpose on the following
understanding:
For the purpose of the Agreement:
The term "Technical Information" shall not include any information which:
(i) is "publicly available" information. The phrase "publicly available"
information shall mean readily accessible to the public in written
publication, and shall not include information which is only available by a
substantial searching of the published literature, and information the
substance of which must be pieced together from a number of different
publications and sources;
(ii) is known to Consultant from sources other than SGI or its Affiliates
prior to the receipt of the same hereunder from SGI or its Affiliates;
(iii) is received by Consultant without restriction on disclosure from a
third party who is legally in possession of such information and has a
right to reveal the same to Consultant.
(iv) AAffiliate(s) of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.
(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with
the physical embodiment of the same whether copyrightable or not, related to
SGI's business.
Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit
of others subject to the obligation of Consultant set forth hereinafter.
b. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by
SGI.
c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, providing
Services to SGI.
8. Developments and Assignment.
a. Developments. Consultant recognizes that Developments have occurred
and/or are expected and likely to occur in the future as the result of the
performance of Consultant's Services, and Consultant covenants and agrees to
hold all Developments as a result of the performance of such Services or
based on SGI's Technical Information in trust for the use and benefit of
SGI, and hereby assigns and agrees to assign all such Developments to SGI.
b. Consultant Disclosure. Consultant shall promptly disclose in writing
to SGI any and all Developments made by Consultant, and or by any members of
his staff, incident to or as a result of the performance of such Services; and
Consultant hereby assigns and agrees to assign all of its right, title and
interest, in all such Developments to SGI. All such Developments shall be
treated as Technical Information of SGI and the obligations of Consultant
under this Agreement shall apply thereto. Consultant further agrees to and
does hereby assign to SGI all right, title and interest in and to the
intellectual property, rights, and processes or techniques embodying the
Developments, including all rights of copyright or rights to patent or use
as a trade secret such Developments, both within the United States and
throughout the world. The obligation of Sections 7 and 8 are continuing and
shall survive the termination of this Agreement.
c. Assignment. Consultant shall execute and/or require his agents, servants
or employees to execute all applications, assignments, or other instruments
of any kind which SGI, at SGI's expense, shall deem proper or necessary to
apply for, obtain and enforce letters patent and/or copyrights of the United
States or of any foreign country or otherwise to protect SGI's interest in
such Developments.
d. Retention. Unless otherwise authorized in writing by SGI, all documents,
drawings and writings provided to Consultant by SGI hereunder or developed
by Consultant hereunder, and all copies thereof shall be returned promptly
to SGI upon completion or termination of Services.
9. Warranties. Consultant hereby warrants that he will carry out his work
in accord with generally accepted practices.
10. Termination. This Agreement shall be effective on the Effective Date
and continue in full force and effect until terminated in writing by either
party during a thirty (30) day period prior to the end of the term of the
Agreement.
11. Independent Contractor. Consultant is and at all times during the term
of this Agreement shall be an independent contractor providing professional
consulting services to SGI. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the
parties. Consultant shall have no power to commit or bind SGI in any manner
whatsoever.
12. Limitation of Liability. In no event shall either of the parties
hereto be liable to the other for the payment of any consequential, indirect,
or special damages, including lost profits.
13. Injunctive Relief. It is hereby understood and agreed that damages
are an inadequate remedy in the event of a breach by Consultant of this
Agreement and that any such breach by Consultant will cause SGI great and
irreparable injury and damage.
Accordingly, Consultant agrees that SGI shall be entitled, without waiving
any additional rights or remedies otherwise available to SGI at law or in
equity or by statute, and without posting any bond for injunctive and other
equitable relief in the event of a breach or intended or threatened breach
by Consultant of this Agreement.
14. Assignment.
a. Consent Required. Consultant shall not assign or subcontract the whole
or any part of this Agreement without SGI's written consent, which can be
withheld for any reason.
b. Subcontracting. Any subcontract made by Consultant with the consent of
SGI, which must be obtained before Consultant enters into any subcontract,
shall incorporate by reference all of the terms of this Agreement. Consultant
agrees to guarantee the performance of any subcontractor used in the
performance of the Services.
15. Conflicting Assignments. During the term of this Agreement, Consultant
shall not accept conflicting assignments, which would put Consultant in a
position where he would be rendering advice or providing information to any
party who might be a potential competitor of SGI presently or in the future,
nor shall Consultant provide any advice, which might disclose any
Developments or Technical Information related to the OCET Technology.
16. Disputes. If any dispute of any kind arises between the parties with
respect to the Consultant's performance under this Agreement, then the
dispute shall be submitted to arbitration in San Diego, California to the
American Arbitration Association (AAA). The dispute shall be submitted to
an arbitrator selected from a panel of arbitrators submitted to the parties
by the AAA. If the parties fail to agree on an arbitrator, the AAA shall
appoint an arbitrator and in the absence of such appointment, the parties
may request an appointment by making an application to the San Diego
Superior Court to order an appointment. Reasonable discovery, including but
not limited to depositions and interrogatories, shall be allowed in any such
arbitration. The decision of the arbitrator shall be binding to the same
extent as if the award were made by a court of competent jurisdiction.
17. Notices. Any and all notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given or received when
delivered personally or forty-eight (48) hours after being mailed, via first
class, postage prepaid, to the addresses set forth immediately below of the
parties hereto or to such other addresses as either of the parties hereto
from time to time designate in writing to the other party.
SGI: SGI International
1200 Prospect, Suite 325
La Jolla,
California
90037 Attn.: Joseph A. Savoca
Consultant: Professor Judith Ware
2539 Woodlands Way
Oceanside, CA 92054
18. Applicable Law. The provisions of this Agreement shall be construed
and enforced in accordance with the laws of the State of California.
19. Entire Agreement and Amendments. This Agreement constitutes the
entire understanding and agreement between the parties relating to the
subject matter hereof and supersedes any prior written or oral understanding
or agreement between the parties relating to the subject matter hereof.
This Agreement shall not be amended, altered, or supplemented in any way
except by an instrument in writing, signed by the duly authorized
representative of the parties, that expressly references this Agreement.
Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed
a waiver of that party's right thereafter to enforce each and every provision
of the Agreement and shall not otherwise affect the validity of this Agreement.
Severability. If any provision of this Agreement is finally determined to
be contrary to, prohibited by, or invalid under applicable laws or
regulations, such provision shall become inapplicable and shall be deemed
omitted from this Agreement. Such determination shall not, however, in any
way invalidate the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
in the year first above written.
SGI Consultant
SGI International,
a Utah Corporation
/s/
By: ================== /s/
By: =====================
Joseph A. Savoca Professor Judith Ware
Exhibit 4.27
December 26, 1996
Board of Directors
SGI International
1200 Prospect Street
La Jolla, CA 92037
Re: Form S-8 Registration Statement
Gentlemen:
We have acted as your special securities counsel in the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission to register 645,314 shares of
common stock, no par value per share (the "Common Stock"), of SGI International,
a Utah corporation (the "Company"). The Common Stock is issuable pursuant to
the terms of certain Consulting Agreements and upon exercise fo the warrants
referenced in the Employment Agreements and Consulting Agreements included in
the Registration Statement.
For purposes of rendering this opinion, we have made such legal and factual
examinations as we have deemed necessary under the circumstances and, as part
of such examination, we have examined among other things, originals and
copies, certified or otherwise, identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed
necessary or appropriate. For the purposes of such examination, we have
assumed the genuineness of all signatures on original documents and the
conformity to original documents of all copies submitted to us.
On the basis of and relying upon the foregoing examination and assumptions,
we are of the opinion that, assuming the Registration Statement shall have
become effective pursuant to the provisions of the Securities Act of 1933,
as amended, the shares of Common Stock being offered in the Registration
Statement, when issued in accordance with the Registration Statement and
the provisions of the Employment Agreement, Consulting Agreements and
Warrants will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
FISHER THURBER LLP
By: /s/ David A. Fisher
==========================
David Fisher
Exhibit 5.0
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Standard Employment Agreements dated as of
October 31, 1995, January 1, 1996, February 26, 1996, March 4, 1996,
March 6, 1996, March 18, 1996, May 23, 1996, May 28, 1996, June 4, 1996,
July 1, 1996, July 18, 1996, July 22, 1996, July 29, 1996, August 1, 1996,
September 30, 1996, October 14, 1996, November 12, 1996, December 2, 1996,
Non-Standard Employment Agreements dated as of April 1, 1995, May 1, 1995,
First Amendments dated as of October 31, 1995, Consulting Agreements dated
as of September 19, 1995 and July 12, 1996, and First Amendment to Consulting
Agreement dated as of January 1, 1996, of our report dated March 11, 1996
with respect to the consolidated financial statements of SGI International
included in its Annual Report (Form 10-K) for the year ended December 31,
1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
December 26, 1996
Exhibit 23.0
