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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and effective as of July 3, 1996,
by and between TYLAN GENERAL, INC., a Delaware corporation (the "Parent"), SPAN
INSTRUMENTS, INC., a Texas corporation and a wholly-owned subsidiary of Parent
(the "Company"), and GEORGE A. YURCH, JR. (the "Employee").
WHEREAS, the Company desires to assure itself of the continued
services of Employee, and Employee desires to be employed by the Company, under
the terms and conditions herein; and
WHEREAS, the Company, the Parent and Employee desire to define their
respective rights and obligations as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT; TERM
(a) EMPLOYMENT. The Company hereby agrees to continue to
employ, and the Parent hereby agrees to cause the Company to continue to employ,
the Employee to serve in the capacity of President of the Company, and Employee
hereby accepts such continued employment by the Company upon the terms and
conditions set forth herein.
(b) TERM. The effective date of this Agreement shall be July
3, 1996 (the "Effective Date") and shall remain in effect until the earlier of
(i) eighteen (18) months from the effective date or (ii) the date when
Employee's employment is terminated pursuant to Section 3 of this Agreement.
(c) DUTIES. During the term of this Agreement, Employee will,
to the best of his ability, devote substantially all of his business time and
attention to the performance of his duties hereunder, including such
responsibilities as shall be established by custom, by the Bylaws of the Company
and, from time to time, by the Board of Directors and/or senior management of
the Company or the Parent.
(d) COMPETITIVE ACTIVITY. Employee, during the term of his
employment hereunder, will not accept any other employment of any nature and
will not engage, directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage) that is or may be competitive with, or
that might place him in a competing position to that of the Company or any other
corporation or entity that
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directly or indirectly controls, is controlled by or is under common control
with the Company.
2. SALARY AND BENEFITS
(a) SALARY. The Company shall pay to Employee for the services
to be rendered hereunder a salary at an annual rate of $198,000, payable in
installments in accordance with Company policy, subject to increase in
accordance with the policies of the Company or the Parent, as determined by its
Board of Directors, in force from time to time (the "Salary").
(b) BENEFITS. Employee shall be eligible to participate in the
Company's employee benefit plans and incentive compensation programs for
employees, including the stock option plan of the Parent, subject in each case
to the generally applicable terms and conditions of the plan or program in
question.
3. TERMINATION
(a) GENERAL. Employee's employment under this Agreement may be
terminated by the Company, the Parent or Employee as herein provided, without
further obligation or liability except as expressly provided herein. The Company
shall not provide or pay for any employee benefits or bonuses following the
termination of Employee's employment pursuant to Section 3(b), 3(c) or 3(d)
hereof, and the vesting of any stock options granted to Employee during the term
of his employment with the Company shall cease on the date of such termination
of employment.
(b) RESIGNATION. Employee's employment hereunder may be
terminated at any time, upon 30 days prior notice, by Employee's resignation. If
Employee resigns, he shall be entitled to receive payments pursuant to Section
4(a) hereof, subject to his full compliance with said Section 4(a).
(c) DEATH OR DISABILITY. Employee's employment shall terminate
upon the date of Employee's death or disability. For purposes of this Agreement,
disability shall be deemed to have occurred only after the following procedure
has been satisfied. If within 45 days after notice of proposed termination for
disability is given to Employee by the Company or the Parent, Employee has not
returned to the performance of substantially all his duties, the Company or the
Parent may terminate Employee's employment by giving notice of termination for
disability. The notice of proposed termination may only be given by the Company
or the Parent following Employee's substantial and material absence from
Employee's duties by reason of physical or mental disability for a period of 120
calendar days.
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(d) TERMINATION FOR CAUSE. Employee's employment hereunder may
be terminated by the Company or the Parent for cause; provided, however, that
Employee shall be given notice of the findings of conduct by Employee amounting
to cause for such termination. Cause for termination under this Agreement shall
be limited to (i) Employee's personal dishonesty or gross misconduct; (ii) a
material breach of any provision of this Agreement; (iii) Employee's refusal or
failure to act in accordance with any lawful, reasonable direction or order of
the Board of Directors or senior management of the Company or the Parent and
such refusal or failure results or is reasonably likely to result in a
materially adverse effect on the Company's or the Parent's business; or (iv) the
continued failure by Employee to perform Employee's duties with the Company or
its subsidiaries or affiliates, including the Parent (other than any failure
resulting from disability) in a manner consistent with Employee's position after
a written demand identifies the manner in which Employee's supervisor believes
that Employee has not substantially performed his duties. Termination of
Employee's employment under this Agreement for cause as set forth in clause (i)
of the preceding sentence shall be deemed to be effective upon delivery of
notice thereof in accordance with the provisions of Section 5(i) of this
Agreement. Employee shall have 30 days from the date notice is given for cause
as set forth in clause (ii), (iii) or (iv) of the second sentence of this
Section 3(d) to cure such conduct.
(e) TERMINATION WITHOUT CAUSE. The Company and the Parent
shall have the right, exercisable at any time during the term of this Agreement
upon written notice to Employee, to terminate Employee's employment without
cause upon 30 days prior notice. If Employee is terminated without cause, he
shall be entitled to receive severance benefits pursuant to Section 4(d) hereof,
subject to his full compliance with said Section 4(d).
(f) TERMINATION OBLIGATIONS. Employee hereby acknowledges and
agrees that all personal property of the Company or the Parent, including,
without limitation, all books, manuals, records, reports, notes, contracts,
lists, and other documents, proprietary information, copies of any of the
foregoing, and equipment furnished to or prepared by Employee in the course of
or incident to his employment, belong to the Company or the Parent, as the case
may be, and shall be promptly returned to the Company or the Parent, as the case
may be, upon termination of his employment for any reason. Employee shall retain
the rights to remove all of his personal property from the premises of the
Company and any personal property of the Company or the Parent as may be
mutually agreed upon between the Company or the Parent and Employee.
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4. PAYMENTS TO EMPLOYEE UPON TERMINATION.
(a) RESIGNATION. In the event of Employee's resignation, the
Company shall continue to pay Employee Employee's Salary for a period of six (6)
months commencing on the date of Employee's resignation. Such salary shall be
determined with reference to the salary in effect for the month in which the
date of employment termination occurs. The Company's obligation to make each
such monthly payment is conditioned on Employee's performance of four (4) hours
of consulting services per month for the Company; provided, however, that the
Company's obligation to make such monthly payments pursuant to this Section 4(a)
shall cease if Employee engages, at any time during the six (6) months following
his resignation, directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage) that is or may be competitive with, or
that might place him in a competing position to that of the Company or any other
corporation or entity that directly or indirectly controls, is controlled by or
is under common control with the Company.
(b) DEATH OR DISABILITY. In the event of Employee's death or
disability, all benefits generally available to the Company's employees as of
the date of such an event as determined by the Board of Directors of the Company
shall be payable to Employee or Employee's estate, without reduction, in
accordance with the terms of any plan, contract, understanding or arrangement
forming the basis for such payment.
(c) TERMINATION FOR CAUSE. In the event Employee is terminated
by the Company or the Parent for cause as provided in Section 3(d) hereof,
Employee shall be entitled to receive the following:
(1) TERMINATION PAYMENT. The Company shall continue
to pay to the Employee his salary for six (6) months following the date of
Employee's actual termination of employment (the "Termination Payment"). Such
salary shall be determined with reference to the salary in effect for the month
in which the date of employment termination occurs.
(d) TERMINATION WITHOUT CAUSE. In the event Employee is
terminated by the Company or the Parent without cause as provided in Section
3(e) hereof, Employee shall be entitled to receive the following:
(1) SEVERANCE PAYMENT. The Company shall continue to
pay to the Employee his salary (i) until the date that is twelve (12) months
from the effective date of this Agreement (the "Initial Period") and (ii) for
six (6) months following the later of (x) the date of Employee's actual
termination of employment and (y) termination of the Initial Period (the
"Severance Payment"). Such salary shall be determined with reference to the
salary in effect for the month in which the date of employment termination
occurs.
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(e) PAYMENT IN LIEU OF CONTRACT DAMAGES. The Termination
Payment and the Severance Payment shall be in lieu of any further payments to
the Employee and any further accrual of benefits with respect to periods
subsequent to the date of the employment termination and shall constitute a full
satisfaction and discharge of any claims by Employee related to the Agreement or
the circumstances surrounding the termination of employment hereunder.
Notwithstanding the preceding sentence, neither the Termination Payment, the
Severance Payment nor any other payments under this Section 4(e) shall reduce or
offset any benefits the Employee may be entitled to under the specific terms of
the benefit plans of the Company.
5. GENERAL PROVISIONS
(a) ENTIRE AGREEMENT. The terms and provisions of this
Agreement, together with the terms and provisions of the Noncompetition
Agreement dated the date hereof between Employee and the Parent, shall
constitute the entire understanding between Employee, the Company and the Parent
with respect to the subject matter hereof, and shall supersede any and all prior
agreements or understandings between Employee, the Company and the Parent,
whether written or oral.
(b) AMENDMENTS. This Agreement may be amended or modified only
by a written instrument executed by Employee, the Company and the Parent.
(c) GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California.
(d) SEVERABILITY. In the event that any terms or provisions of
this Agreement shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining terms and provisions hereof.
(e) ASSUMPTION. The Company and the Parent shall require any
successor-in-interest (whether direct or indirect or as a result of purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company or the Parent to expressly assume and agree to
perform the obligations under this Agreement in the same manner and to the same
extent that the Company or the Parent would be required to perform it if no such
succession had taken place.
(f) ASSIGNABILITY. The rights or obligations contained in this
Agreement shall not be assigned, transferred or divided in any manner by
Employee, the Company or the Parent, without the prior written consent of the
other; provided, however, that nothing in this Section 5(f) shall preclude
Employee from designating a beneficiary to receive any benefits hereunder upon
his death, or the executors, administrators or other legal
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representatives of Employee or his estate from assigning any rights hereunder to
the person(s) entitled thereto. Notwithstanding the foregoing, this Agreement
shall be assignable by the Company without Employee's consent and be binding on
(i) the Parent or any other affiliate of the Company, and (ii) any entity which
by purchase of assets, merger or otherwise, becomes a successor to the business
of the Company or the Parent.
(g) WAIVER OF BREACH. Any waiver of any breach of employment
terms set forth herein shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part of Employee, the Parent or the
Company.
(h) HEADINGS. The headings of paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation and performance of any of the provisions of this Agreement.
(i) NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or if mailed by United States certified or
registered mail, prepaid, to the parties or their permitted assignees at the
following addresses (or at such other address as shall be given in writing by
either party to the other):
To: Tylan General, Inc.
15330 Avenue of Science
San Diego, California 92128
Attn: Chief Executive Officer
To: Span Instruments, Inc.
2201 Avenue K
Plano, Texas 75074
Attn: President
To: George A. Yurch, Jr.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first written above.
TYLAN GENERAL, INC. SPAN INSTRUMENTS, INC.
By: /s/ David J. Ferran By: /s/ Donald E. Whitson
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Its: Chairman of the Board, President Its: Chief Executive Officer
and Chief Executive Officer
EMPLOYEE
/s/ George A. Yurch, Jr.
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George A. Yurch, Jr.
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