"Lancer Orthodontics" Board of Directors approved at their November 19, 2004
Board of Directors meeting, the promotion and appointment of Dan Castner to
the position of President of the Corporation. An employment agreement
memorializing this appointment was signed by Lancer and Mr. Castner on
November 29, 2004, and is attached hereto."
EMPLOYMENT AGREEMENT
This Agreement made and entered into as of the 1st day of November 29,
2004 by and between Lancer Orthodontics, Inc., a California corporation,
having a place of business at 253 Pawnee Street, San Marcos, CA 92069
("Employer" or "Lancer"), and, Dan Castner, having an address at 1416 Branta
Ave Carlsbad, CA 92009 ("Employee" or "Castner").
WITNESSETH:
WHEREAS, Lancer is engaged in the manufacturing, marketing, and
distribution of orthodontic products; and
WHEREAS, Lancer desires to employ Castner as President, and Castner
desires to be so employed by Lancer, all pursuant to the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is agreed as follows:
1. EMPLOYMENT: DUTIES
(a) Lancer hereby agrees to employ Castner, and Castner hereby
agrees to accept employment during the term hereof as President, and shall
perform such services as are customarily performed by persons holding such
office, subject at all times to the direction of the CEO or such other
designee as the Board of Directors of Employer shall determine. Employee's
responsibilities hereunder shall be the general oversight of all of the
Employer's operating divisions. Employee understands that all significant
human resource decisions, including any hiring, termination or change in
compensation requires the written approval of the CEO of the Employer.
Nothing herein contained shall be construed as (i) preventing Employee from
investing his personal assets in any business, provided such business venture
or business does not compete with Employer or conflict with Employee's duties
and obligations as an officer and director of the Employer, or (ii) preventing
Employee from purchasing securities in any corporation whose securities are
regularly publicly traded, if such purchases shall not result in his owning
beneficially at any time two-percent (2%) or more of the equity securities of
any corporation engaged in a business which is not competitive to that of
Employer.
(b) Castner shall devote his full-time professional efforts to
Lancer. In no event shall Castner perform any active or passive management,
operational or consulting services whatsoever for any other corporation or
organization, irrespective of whether he has any investment interest therein.
2. TERM
Employee's employment hereunder shall be for a two (2) year term,
commencing November 1, 2004 and ending on October 31, 2006. This Agreement
shall be automatically extended from month to month thereafter unless either
party gives not less than fourteen days (14) days written notice to the other
that such party elects to have the Agreement terminated effective at the end
of the initial two (2) year period or the then current monthly renewal term.
3. COMPENSATION
(a) As compensation for the performance of his duties on behalf of
Employer, effective November 1, 2004, Employer shall pay Employee a base
salary at the rate of One Hundred and Fifty-Five Thousand Dollars
($155,000.00) per annum, payable in installments in accordance with the
usual practice of the Employer. The Employee will be considered for merit
increase after first 12 months under this agreement. This will be based on
Lancer's current Evaluation Policies and Procedures.
(b) Employer shall reimburse Employee for the expenses incurred by
Employee in connection with his duties hereunder upon presentation by
Employee of the details of vouchers for such expenses in accordance with
customary Employer practice.
(c) Employer will reimburse Employee for all legal fees Employee
incurred to review and initiate this agreement. This will not exceed $2000
and will be supported by itemized receipts.
(d) Employee will receive a monthly car allowance of $300 per month
throughout this agreement. This will be itemized under normal expense
reporting procedures.
(e) Employee shall be entitled to participate in all retirement,
life insurance, medical insurance, disability insurance, vacation, savings
and other employee benefit plans generally available to the senior officers of
the Employer, so long as such benefits comply with applicable law (including
without limitation the Internal Revenue Code of 1986, as amended, and ERISA).
Employee may be eligible for royalties on any intellectual properties invented
by Employee or co-invented by Employee, however such royalties are in no way
guaranteed. These inventions must be patented. If such royalties are agreed
upon, the amount and duration of such royalty will be negotiated and
documented in a separate agreement.
(f) Employee has option to consult and lecture for fees for
"Influence at Work Program" This program will be part of Lancer Learning
Program and be done to also promote and sell Lancer Appliances. All time and
fees will be approved by CEO.
(g) No later than May 31, 2005, Employee shall be granted stock
options to purchase 100,000 shares of the Employer's common stock at an
exercise price equal to the fair market value of the Employer's common stock
on the date of grant, as determined by the trading price of the stock and the
Board of Directors, with one twenty-forth (1/24) vesting per month each month
thereafter for said two (2) year period. Should the Employer be purchased by
an unaffiliated third party, any remaining unvested options shall immediately
vest. The options shall have a term of five (5) years. However, the options
shall terminate 60 days from the date of termination of the Employee's
relationship with the company or any of its subsidiaries other than by reason
of death or disability.
4. NON-COMPETITION
(a) Subsequent to the expiration or termination of this Agreement,
Employee will not interfere with or disrupt or attempt to disrupt Employer's
business relationship with its customers or suppliers or solicit the
employees of Employer.
(b) During the term of this Agreement and for a period of twenty-
four (24) months from the date of termination of his employment hereunder for
whatever reason, Employee will not disclose or use or enable anyone else to
use any non public information or data which may be obtained by him or
available to him during the term of employment.
(b) During the term of this Agreement and for a period of twenty-
four (24) months from the date of termination of his employment hereunder for
whatever reason, Employee agrees that he will not solicit any customers who
are presently or may hereafter become customers of Employer unless such
solicitation is entirely unrelated to Employer's business. Employee further
agrees not to compete in any way with Employer, alone or together with others,
in any business in which Employer is engaged at the time of termination of
employment.
(c) In the event that Employee breaches any provisions of this
paragraph or there is a threatened breach, then, in addition to any other
rights which Employer may have, Employer shall be entitled to injunctive
relief to enforce the restrictions contained herein. In the event that an
actual proceeding is brought in equity to enforce the provisions of this
paragraph, Employee shall not urge as a defense that there is an adequate
remedy at law nor shall Employer be prevented from seeking any other remedies
which may be available.
(d) The existence of any claim or cause of action by Employee
against Employer, whether predicated upon this Agreement or otherwise, shall
not constitute a defense to the enforcement by Employer of the foregoing
restrictive
Change of Control Provision will apply to this agreement in any of
the following scenarios where the Employee can leave with severance and
partial or full vesting, if they occur.
a. Acquisition of all or substantially all of the company's
assets by a third party;
b. Acquisition of a majority of the company's outstanding
voting common stock by any person not currently holding such
a majority
c. A change in CEO not occasioned by retirement, expiration
of the CEO's employment agreement, disability or death
d. A merger or acquisition in which the Company is not the
surviving or acquiring entity
5. TERMINATION
(a) Anything to the contrary notwithstanding, this Agreement shall
terminate thirty (30) days after the Employee's (i) death or (ii) disability
for a period of not less than twenty-six (26) consecutive weeks; provided,
however, that the provisions of Section 6 hereof shall remain in full force
and effect through the end of the term hereof.
(b) Employee's employment hereunder may also be terminated by the
Employer before the expiration of the term hereof only for cause as herein
defined. "Cause" shall mean only one or more of the following occurrences:
(i) The Employee's conviction of a felony by a court of
competent jurisdiction (which conviction, through lapse of time or
otherwise, is not subject to appeal); or
The Employee's commission of an act of fraud or embezzlement
upon the Employer and/or falsification of records or statements
of Employer;
(i) Material breach of this agreement; or
(ii) Intentional misuse of funds or property of Employer; or
(iii) Failure or inability of Employee to reasonably perform
his duties and services to Lancer; or
(iv) Other substantial misconduct by Employee that results
in material adverse effect, discredit or disrepute to Lancer.
6. SEVERANCE
In the event of termination of employment of Employee by Employer
before the expiration of the term hereof, except when such termination is in
accordance with the provisions of paragraph 5(a) or 5(b) hereof, Employer
will provide Employee with severance pay in the amount of One Hundred Fifty-
Five Thousand Dollars ($155,000.000), payable one-twelfth (1/12) per month
for twelve (12) consecutive months. Employer shall also continue to provide
to Employee the retirement benefits, life insurance, medical insurance and
disability insurance pursuant to Section 3(c) for the twelve (12) month
severance payment period. In the event that there is a change of control
defined in paragraph 4 this severance obligation shall trigger and become
payable to Castner if he is not offered a position which is comparable in
content, location, reporting relationships and compensation by the purchaser.
7. NOTICES
All notices hereunder shall be in writing and shall be delivered in
person or given by registered or certified mail, postage prepaid, and sent to
the parties at the respective addresses above set forth. Either party may
designate any other address to which notice shall be given, by giving notice
to the other of such change of address in the manner herein provided.
8. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced
in whole or in part, the remaining conditions and provisions or portions
thereof shall nevertheless remain in full force and effect and enforceable to
the extent they are valid, legal and enforceable, and no provision shall be
deemed dependent upon any other covenant or provision unless so expressed
herein.
9. GOVERNING LAW
This Agreement shall be construed and governed by the laws of the
State of California.
10. NON-WAIVER
The failure of either party to insist upon the strict performance of
any term or condition in this Agreement shall not be considered a waiver or
relinquishment of future compliance therewith.
11. ENTIRE AGREEMENT; MODIFICATION
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof. No modification of this Agreement
shall be valid unless it is made in writing and signed by the parties hereto.
12. NON-ASSIGNMENT; SUCCESSORS
Neither party hereto may assign his or its rights or delegate his
or its duties under this Agreement without the prior written consent of the
other party; provided, however, that (i) this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Employer
upon any sale of all or substantially all of the Employer's assets, or upon
any merger, consolidation or reorganization of the Employer with or into any
other corporation, all as though such successors and assigns of the Employer
and their respective successors and assigns were the Employer; and (ii) this
Agreement shall inure to the benefit of and be binding upon the heirs, assigns
or designees of the Employee to the extent of any payments due to them
hereunder. As used in this Agreement, the term "Employer" shall be deemed to
refer to any such successor or assign of the Employer referred to in the
preceding sentence.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Lancer Orthodontics, Inc,
By:_______________________
/s/ Allen Barbieri
Allen Barbieri, CEO
_______________________
/s/ Dan Castner
Dan Castner