EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement") is made as of May 13, 1998 (the "Effective
Date"), by and among Lasiris, Inc., a Canadian corporation (the "Employer") and
a wholly owned, indirect subsidiary of Stocker & Yale, Inc. ("S&Y"), and Luc
Many (the "Executive").
WHEREAS, concurrently herewith, Lasiris Holdings, Inc., a New Brunswick
corporation and a subsidiary of S&Y ("Holding"), is acquiring, directly or
indirectly, all of the issued and outstanding capital stock of the Employer,
pursuant to that certain Offer of Purchase and Sale, dated as of March 14, 1998
(the "Offer"), by and among S&Y, the Employer, and each holder of shares of the
capital stock of the Employer;
WHEREAS, the Executive has served as General Manager of the Employer from
April 1987 until and including the Effective Date;
WHEREAS, the Employer desires to employ the Executive in connection with,
and to ensure continuity in, the management of the Employer's business and
affairs;
WHEREAS, the Executive desires to be employed to provide such services;
WHEREAS, as a result of his prior employment with the Employer and his
continuing employment with the Employer, the Executive has had, and will
continue to have, access to trade secrets and confidential information of the
Employer (including, but not limited to, those trade secrets and confidential
information held by the Employer prior to and as of the Effective Date);
WHEREAS, the execution and delivery of this Agreement by the Executive is a
condition precedent to the obligation of S&Y and Holding to consummate the
transactions contemplated by the Offer; and
WHEREAS, in consideration thereof and of his employment and in connection
with his access to such trade secrets and confidential information, the
Executive has also agreed to be bound by certain non-competition,
non-solicitation and non-disclosure provisions.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby irrevocably acknowledged, the Employer and the Executive agree as
follows:
1. Employment. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.
2. Capacity. The Executive shall be employed as Executive Vice President
and General Manager, subject to election by the Board of Directors of the
Employer (the "Board of Directors"). The Employer shall take all reasonable
means to cause the election of the Executive to the office of Executive Vice
President and General Manager. In such capacity or capacities, the Executive
shall perform such services and duties in connection with the business, affairs
and operations of the Employer as may be assigned or delegated to the Executive
from time to time by or under the authority of the Board of Directors or the
President and Chief Executive Officer.
3. Term. Subject to the provisions of Section 6, the term of employment
pursuant to this Agreement (the "Term") shall expire on the date which is the
third anniversary (the "Third Anniversary") of the date hereof, and shall be
renewed automatically for periods of one (1) year commencing on the Third
Anniversary, and on each subsequent anniversary thereafter, unless either the
Employee or the Employer gives written notice to the other not less than ninety
(90) days prior to the Third Anniversary or any such anniversary of such party's
election not to extend the Term. In the event of any renewal of this Agreement,
the Executive's employment by the Employer shall be on substantially the same
terms as set forth herein, except as may be revised, amended or supplemented by
the mutual agreement of the parties. In the event that (i) the Employer elects
not to renew this Agreement or (ii) the Employer offers to extend the Agreement
on terms and conditions which are not substantially similar to those set forth
herein and, solely as a result thereof, the Executive elects not to renew this
Agreement, the Executive shall be entitled to receive an indemnity (the "Non-
Renewal Payment") in an amount equal to the Executive's annual Salary then in
effect which shall be paid in a single payment on the effective date of the
termination of the Executive. The Executive acknowledges and agrees that in
connection with any such non-renewal the notice provided for in this Section 3
and the payment of the Non-Renewal Payment described herein are reasonable and
adequate in light of the circumstances relating to the execution and delivery of
this Agreement and Executive's employment by the Employer.
4. Compensation and Benefits. The regular compensation and benefits payable
to the Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Executive under this
Agreement, the Employer shall pay the Executive a salary (the "Salary") at
the annual rate of One Hundred Fifty Thousand Canadian dollars ($150,000
(CDN)). The Salary shall be payable in periodic installments in accordance
with the Employer's usual practice for its senior executives.
(b) Bonus. The Employee shall be entitled to incentive compensation
pursuant to the terms of the Employer's Incentive Compensation Plan (the
"Incentive Plan") established by the Board of Directors of S&Y (the "S&Y
Board"), a copy of which is attached hereto as Exhibit A.
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(c) Regular Benefits. The Executive shall also be entitled to
participate in any employee benefit plans, medical insurance plans, life
insurance plans, disability income plans, retirement plans, vacation plans,
expense reimbursement plans and other benefit plans which the Employer may
from time to time have in effect for all or most of its senior executives.
Such participation shall be subject to the terms of the applicable plan
documents, generally applicable policies of the Employer, applicable law.
(d) Stock Option Plan. The Executive shall be entitled to participate
in any stock option or grant plan which S&Y may from time to time have in
effect for most of all of its senior executives. Such participation shall
be subject to the terms of the applicable plan documents, generally
applicable policies of S&Y, applicable law and the discretion of the S&Y
Board and the Compensation Committee of the S&Y Board. Nothing contained in
this Agreement shall be construed to create any obligation on the part of
S&Y to establish any such plan or to maintain the effectiveness of any such
plan which may be in effect from time to time.
(e) Taxation of Payments and Benefits. The Employer shall undertake to
make deductions, withholdings and tax reports with respect to payments and
benefits under this Agreement to the extent that it reasonably and in good
faith believes that it is required to make such deductions, withholdings
and tax reports. Actual payments to the Executive under this Agreement
shall be in amounts net of any such deductions or withholdings. Nothing in
this Agreement shall be construed to require the Employer to make any
payments to compensate the Executive for any adverse tax effect associated
with any payments or benefits or for any deduction or withholding from any
payment or benefit.
(f) Exclusivity of Salary and Benefits. The Executive shall not be
entitled to any payments or benefits other than those provided under this
Agreement or under the Incentive Plan.
5. Extent of Service. During the Executive's employment under this
Agreement, the Executive shall, subject to the direction and supervision of the
Board of Directors and the Employer's President and Chief Executive Officer,
devote the Executive's full business time, best efforts and business judgment,
skill and knowledge to the advancement of the Employer's interests and to the
discharge of the Executive's duties and responsibilities under this Agreement.
The Executive shall not engage in any other business activity, except as may be
approved by the Board of Directors; provided that nothing in this Agreement
shall be construed as preventing the Executive from:
(a) investing the Executive's own assets in any company or other entity
in a manner not prohibited by Section 7(d) and in such form or manner as
shall not require any material activities on the Executive's part in
connection with the operations or affairs of the companies or other
entities in which such investments are made; or
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(b) engaging in religious, charitable or other community or non-profit
activities that do not impair the Executive's ability to fulfill the
Executive's duties and responsibilities under this Agreement.
6. Termination and Termination Benefits. Notwithstanding the provisions of
Section 3, the Executive's employment under this Agreement shall terminate under
the following circumstances set forth in this Section 6.
(a) Termination by the Employer for Cause. The Executive's employment
under this Agreement may be terminated for cause without further liability
on the part of the Employer effective immediately upon a vote of the Board
of Directors and written notice to the Executive and without further notice
or indemnity. Only the following shall constitute "cause" for such
termination:
(i) dishonest statements or acts of the Executive with respect to
the Employer or any affiliate of the Employer or any related companies;
(ii) Executive shall have been convicted of, or shall plead guilty
or nolo contendere to, any felony (other than a driving-related
offense);
(iii) gross negligence, willful misconduct or insubordination of
the Executive with respect to the Employer or any affiliate of the
Employer or any related company; or
(iv) material breach by the Executive of any of the Executive's
obligations under this Agreement.
(b) Termination by the Executive. The Executive's employment under this
Agreement may be terminated by the Executive by written notice to the Board
of Directors at least ninety (90) days prior to such termination.
(c) Termination by the Employer Without Cause. Subject to the payment
of Termination Benefits pursuant to Section 6(d), the Executive's
employment under this Agreement may be terminated by the Employer without
cause upon written notice by a vote of the Board of Directors to the
Executive. The parties acknowledge and agree that any relocation of the
Executive away from the greater Montreal area without the Executive's
consent shall be deemed to be a termination without cause.
(d) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or otherwise required by law, all compensation
and benefits payable to the Executive under this Agreement shall terminate
on the date of termination of the Executive's employment under this
Agreement. Notwithstanding the foregoing, in the event of termination of
the Executive's employment with the Employer pursuant to
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Section 6(c) above, the Employer shall provide to the Executive the
following termination benefits ("Termination Benefits"):
(i) For the period which is the greater of (x) the remainder of the
term or (y) twelve (12) months following the Executive's termination
(the "Indemnity Period"), an indemnity in an amount equal to the Salary
in effect at the time of the termination of the Executive's employment
payable in a single payment within five (5) days of such termination;
(ii) During the Indemnity Period continuation of the medical and
dental plans in effect at the date of termination of employment,
excluding long-term disability coverage for any incident occurring
after his termination of employment; provided, however, that Company
shall have no obligations under this Section 6(d)(ii) from and after
the date on which the Executive commences alternative employment; and
(iii) For a period not to exceed twelve (12) months, following
termination of the Executive's employment by Employer, the Employer
shall provide career consulting services to the Executive; provided
that the Employer shall not be required to incur costs or expenses in
excess of $7,500 (CDN) in connection with such career consulting
services.
Notwithstanding the payment of the indemnity and the continuation of
certain post-termination benefits as provided in this Section 6(d), the
parties hereto acknowledge and agree that the Executive's status as an
employee of the Employer shall terminate on the effective date of any
termination pursuant to this Section 6.
(e) Disability. If the Executive shall be disabled so as to be unable
to perform the essential functions of the Executive's then existing
position or positions under this Agreement with or without reasonable
accommodation, the Board of Directors may remove the Executive from any
responsibilities and/or reassign the Executive to another position with the
Employer. Notwithstanding any such removal or reassignment, the Executive
shall continue to receive the Executive's full Salary (less any disability
pay or sick pay benefits to which the Executive may be entitled under the
Employer's policies) and benefits under Section 4 of this Agreement (except
to the extent that the Executive may be ineligible for one or more such
benefits under applicable plan terms) for a period of time which is the
greater of twelve (12) months or the remainder of the Term. If any question
shall arise as to whether during any period the Executive is disabled so as
to be unable to perform the essential functions of the Executive's then
existing position or positions with or without reasonable accommodation,
the Executive may, and at the request of the Employer shall, submit to the
Employer a certification in reasonable detail by a physician mutually
acceptable to the Employer, on one hand, and the Executive or the
Executive's guardian, on the other as to whether the Executive is so
disabled or how long such disability is expected to
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continue, and such certification shall for the purposes of this Agreement
be conclusive of the issue. The Executive shall cooperate with any
reasonable request of the physician in connection with such certification.
If such question shall arise and the Executive shall fail to submit such
certification, the Employer's determination of such issue shall be binding
on the Executive. Subject to the provisions of this Section 6(e), the
Employer may terminate the employment of the Executive upon written notice,
approved by the Board of Directors, if the Executive becomes physically or
mentally disabled to such an extent as it makes him unable to perform his
duties normally and adequately for a period of or periods totaling at least
six months during any period of twelve consecutive months; provided, that
the foregoing shall not limit the Executive's right to continue to benefit
from such applicable short term or long term disability insurance plans in
accordance with the terms thereof.
7. Confidential Information, Noncompetition and Cooperation.
(a) Confidential Information. As used in this Agreement, "Confidential
Information" means information belonging to the Employer which is of value
to the Employer in the course of conducting its business and the disclosure
of which could result in a competitive or other disadvantage to the
Employer. Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other
intellectual property; trade secrets; know-how; designs, processes or
formulae; software; market or sales information or plans; customer lists;
business plans; and possible acquisitions or dispositions of businesses or
facilities which have been discussed or considered by the management of the
Employer. Confidential Information includes information developed by the
Executive in the course of the Executive's employment by the Employer, as
well as other information to which the Executive may have access in
connection with the Executive's employment. Confidential Information also
includes the confidential information of others with which the Employer has
a business relationship. Notwithstanding the foregoing, Confidential
Information does not include information in the public domain, unless due
to breach of the Executive's duties under Section 7(b).
(b) Confidentiality. The Executive understands and agrees that the
Executive's employment creates a relationship of confidence and trust
between the Executive and the Employer with respect to all Confidential
Information. At all times, both during the Executive's employment with the
Employer and for a period which shall be the greater of (i) five (5) years
or (ii) such period as the Confidential Information may reasonably be
deemed to be of value to the Employer or any of its affiliates after his
termination, the Executive will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such
Confidential Information without the written consent of the Employer,
except as may be necessary in the ordinary course of performing the
Executive's duties to the Employer.
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(c) Documents, Records, etc. All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to
Confidential Information, which are furnished to the Executive by the
Employer or are produced by the Executive in connection with the
Executive's employment will be and remain the sole property of the
Employer. The Executive will return to the Employer all such materials and
property as and when requested by the Employer. In any event, the Executive
will return all such materials and property immediately upon termination of
the Executive's employment for any reason. The Executive will not retain
with the Executive any such material or property or any copies thereof
after such termination.
(d) Noncompetition. During the Term and for one (1) year thereafter,
the Executive will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage,
participate, assist or invest in any Competing Business (as hereinafter
defined). The Executive acknowledges that the restrictions set forth in
this Section 7(d) are necessary to protect the Employer's legitimate
interest in its Confidential Information and established employee, customer
and supplier relationships and goodwill, and agrees that such restrictions
are reasonable and appropriate for this purpose. For purposes of this
Agreement, the term "Competing Business" shall mean a business conducted
anywhere in the United States of America which is substantially similar to
and competitive with the industrial lighting, lasers for machine vision or
phase masks business which the Employer or any of its affiliates conducts
at the time the employment of the Executive is terminated.
(e) Nonsolicitation. During the Term and for two (2) years thereafter,
the Executive will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer, or otherwise (i)
employ, attempt to employ, recruit or otherwise solicit, induce or
influence any person to leave employment with the Employer (other than
terminations of employment of subordinate employees undertaken in the
course of the Executive's employment with the Employer); or (ii) solicit or
encourage or permit the use of the Executive's name to solicit or encourage
any customer or supplier to terminate or otherwise modify adversely its
business relationship with the Employer.
8. Ownership of Inventions, Files and Other Property.
(a) The Executive hereby assigns and agrees to the Employer all his
rights in inventions, discoveries, developments, improvements and ideas
(the "Covered Property") made or designed by him or that may be made or
designed by him for the duration of his employment, whether alone or
jointly with other persons, using the equipment or facilities of the
Employer or within a period of one (1) year following the termination of
his employment, if such Covered Property results from or arises out of any
work performed by the Executive on behalf of the Employer and are connected
with any matter relating to any goods, products or services manufactured,
assembled,
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distributed sold, in development, or otherwise provided by the Employer
or any of its affiliates as the business of such entities is conducted
as of the date of the termination of the Executive's employment by the
Employer.
(b) The Executive shall make full and prompt disclosure to the Employer
of all Covered Property covered by this Section 8 and shall not disclose to
any other person any related information without obtaining the prior
written authorization of the Employer.
(c) At any time for the duration of his employment or after the
termination of his employment, the Executive shall sign, acknowledge and
deliver, at the Employer's expense, but without other compensation than a
reasonable sum for the time he devotes thereto if his employment has then
terminated, any document, including applications for patents and for
assignment of all interests related thereto or related to the Covered
Property referred to in this Section 8, as required to enable the Employer
to publish or protect such Covered Property by patents or otherwise in one
country or in all countries, and shall assign to the Employer the ownership
of such Covered Property. The Executive hereunder shall also give any other
assistance as the Employer may require with respect to any proceeding or
litigation before the Patent Office of Canada or the Patent and Trademark
Office in the United States of America relating to such Covered Property.
The Employer shall reimburse the Executive for (i) any reasonable
out-of-pocket expenses and (ii) any loss of salary actually incurred in
connection with the Executive's performance of obligations pursuant to this
Section 8(c); provided that any payment in respect of loss salary shall be
paid at a per diem rate not in excess of the highest salary paid
(calculated on a per diem basis) to the Executive during the Term of this
Agreement or any renewal thereof.
(d) The full list of Covered Property, whether or not patented, made,
designed or invented by the Executive previous to his employment hereunder
is attached to this agreement. In the absence of such a list, the Executive
declares and certifies that he has not made, designed or invented any
Covered Property previous to his employment.
(e) Any file, sketch, drawing, letter, report, memo or other document,
any equipment, machinery, tool, instrument or other device, any diskette,
recording tape, compact disc or other property relating in any way to the
business or operation of the Employer or any of its affiliates which comes
into the Executive's possession during his employment by the Employer, in
the performance or in the course of his work, regardless of whether he has
participated in its preparation or design, how it may have come into his
possession and whether or not it is an original or a copy, shall at all
times remain the property of the Employer and, upon the termination of the
Executive's employment, shall not be removed from the Employer's premises
but shall be returned to the Employer or its designated representative
before the Executive leaves his place of work.
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9. Third-Party Agreements and Rights. The Executive hereby confirms that
the Executive is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way the Executive's use or
disclosure of information or the Executive's engagement in any business. The
Executive represents to the Employer that the Executive's execution of this
Agreement, the Executive's employment with the Employer and the performance of
the Executive's proposed duties for the Employer will not violate any
obligations the Executive may have to any such previous employer or other party.
In the Executive's work for the Employer, the Executive will not disclose or
make use of any information in violation of any agreements with or rights of any
such previous employer or other party, and the Executive will not bring to the
premises of the Employer any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous employment or other
party.
10. Litigation and Regulatory Cooperation. During and after the Executive's
employment, the Executive shall cooperate fully with the Employer in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Employer which relate to events or
occurrences that transpired while the Executive was employed by the Employer.
The Executive's full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Employer at
mutually convenient times. During and after the Executive's employment, the
Executive also shall cooperate fully with the Employer in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Employer. The Employer shall
reimburse the Executive for (i) any reasonable out-of-pocket expenses and (ii)
any loss of salary actually incurred in connection with the Executive's
performance of obligations pursuant to this Section 10; provided that any
payment in respect of loss salary shall be paid at a per diem rate not in excess
of the highest salary paid (calculated on a per diem basis) to the Executive
during the Term of this Agreement or any renewal thereof.
11. Injunction. The Executive agrees that it could be difficult to measure
any damages caused to the Employer which might result from any breach by the
Executive of the agreements set forth in Section 7 or Section 8 hereof, and that
in any event money damages could be an inadequate remedy for any such breach.
12. Consent to Jurisdiction. The parties hereby agree that the court having
jurisdiction in any action or procedure regarding the application,
interpretation, execution and enforcement of the present Agreement shall be
under the jurisdiction of the Court of the Province of Quebec in the judicial
district of Montreal.
13. Integration. This Agreement, including the preamble hereto, constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements between the parties with respect to
any related subject matter. The terms
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of the present Agreement resolve and cancel any prior agreement, verbal or
written with respect to the Executive's employment, each of the parties granting
the other full and final release and discharge from any action, cause of action,
claim or demand of any nature based on or arising out of the terms or provisions
of any prior agreement.
14. Assignment; Successors and Assigns, etc. Neither the Employer nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
15. Enforceability. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
16. Waiver. No waiver or modification of any provision hereof shall be
effective unless made in writing and signed by the waiving party. The failure of
any party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, shall not
prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
17. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at its main offices, attention of the
Chief Executive Officer, and shall be effective on the date of delivery in
person or by courier or three (3) days after the date mailed.
18. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Employer.
19. Governing Law. This is a contract made under the laws of the Province
of Quebec, Canada and shall be construed under and be governed in all respects
by the laws of the Province of Quebec.
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20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
21. Choice of Language. At the request of the parties, this Agreement and
all documents relating thereto have been, and shall be, drawn up in the English
language. A la demande des parties aux presentes, cette convention et tout
document sy rapportant ont ete rediges en langue anglaise.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been executed in the City of
Montreal by the Employer, by a duly authorized officer, and by Executive as of
the Effective Date.
EMPLOYER
LASIRIS, INC.
By: /s/ Alain Beauregard
--------------------
Name: Alain Beauregard
Title:
EXECUTIVE
/s/ Luc Many
------------
Luc Many
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