Employment Agr


     

    Exhibit
      10.6

    
 

    EMPLOYMENT
      AGREEMENT

    


    This
      Employment Agreement ("Agreement") is made and entered into as of the date
      last
      written below (the "Effective Date"), by and between STRASBAUGH, a California
      corporation ("Company"), and ALAN STRASBAUGH ("Employee") with reference to
      the
      following facts:

    


    A. The
      Company wishes to retain the services of the Employee as a technical advisor,
      upon the terms and conditions herein stated.

     

    B. The
      Employee desires to provide the Company with his services as a technical
      advisor, upon the terms and conditions herein stated. 

     

    C. This
      Agreement shall supersede the existing Employment Agreement between Company
      and
      Employer, dated 8 December 2003.

     

    NOW,
      THEREFORE, for valuable consideration, the receipt and satisfaction of which
      is
      acknowledged, the parties agree as follows:

    


    1.
       Employment.
      The
      Company hereby employs the Employee as of the Effective Date, and the Employee
      hereby accepts employment with the Company upon the terms and conditions set
      forth in this Agreement. 

    


    2.
       Duties
      and Reporting Relationships. Employee
      is hereby employed as a technical advisor to the Company. Employee shall
      actively participate, as requested by the Board of Directors or the senior
      level
      executives of the Company, in all intellectual property meetings and related
      activities, attend engineer reviews, attend staff meetings, and other meetings
      as appropriate. Employee shall provide technical assistance on Company projects
      as requested. Employee shall make himself available during normal business
      hours
      of the Company, upon reasonable notice, to perform his services as technical
      advisor; provided, however, Employee shall not be required to work more than
      thirty (30) hours in a work week.

    


    3.
       Compensation
      and Benefits.

    


    (a) Base
      Salary.
      The
      Company shall pay Employee an annual base salary of One Hundred Thousand Dollars
      ($100,000.00) ("Base Salary"). 

    


    (b) Insurance
      and Benefits.
      Employee shall be eligible to participate in all benefit programs offered to
      senior level executives of the Company including, but not limited to, life
      and
      group health insurance, and shall be eligible for holiday and vacation pay
      in
      accordance with the Company's policies. Notwithstanding the foregoing, Employee
      shall receive no less than 200 hours of PTO for each year of employment under
      this Agreement. Employee shall not be eligible to participate in any Company
      stock option plan as an employee of the Company, but Employee shall remain
      eligible to participate in any and all such plans as a director of the
      Company.

    


    (c) Throughout
      the term of this Agreement, Employee shall have the exclusive use of his current
      office and its attached garage. 

    


    
      
        
        

      

      
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    4.
       Term.
      The
      initial term of this Agreement is for five years from the Effective Date (the
      "Initial Term"). The Initial Term may be extended by the mutual agreement of
      the
      parties.

    


    5.
       For
      Cause Termination.
      Employee
      shall be subject to immediate termination without notice for "cause." For
      purposes of this Agreement, "cause" shall mean the following:

    


    (a) Any
      act
      of personal dishonesty, including, but not limited to, any intentional
      misapplication of the Company's funds or other property, or action resulting
      in
      personal gain to the Employee at the expense of the Company;

    


    (b) Employee's
      regular neglect of his duties or Employee's gross negligence or willful
      misconduct in the performance of his duties;

    


    (c) Disobedience
      of a lawful and reasonable order or directive given to Employee by the Board
      of
      Directors of Company and within the scope of Employee's duties that is not
      cured
      within ten (10) days after receiving written notice from the Company. Employee
      shall abstain from any votes by the Board of Directors of Company or an
      unauthorized subcommittee thereof relating to this Agreement and Employee's
      performance hereunder;

    


    (d) Employee's
      participation in a criminal activity or in an activity involving moral turpitude
      that has a material adverse effect (the report in the public media of conduct
      described in this subparagraph d, above, shall be deemed to cause a material
      adverse effect on the Company); or

    


    (e) Employee's
      misappropriation or disclosure to others in competition with Company any
      Confidential Information of the Company, including investment prospects,
      analysis or advice, customer lists, plans or other property interests of the
      Company.


     

    6.
       Termination
      on Disability.
      This
      Agreement shall terminate upon the disability of Employee. For purposes of
      this
      Agreement, "disability" shall be defined to mean the Employee's physical or
      mental inability to perform his duties hereunder for a period of sixty (60)
      consecutive days, or for a cumulative total of ninety (90) days (which need
      not
      be consecutive) within any period of three hundred sixty-five (365) days, due
      to
      accident, sickness or other disability that prevents the Employee from
      satisfactorily performing the scope of his duties hereunder as such duties
      exist
      on the date immediately prior to the date the Employee was first absent from
      work due to such disability. 

    


    7.
       Termination
      on Death.
      This
      Agreement shall terminate upon the death of Employee. If Employee dies during
      the term of this Agreement, the Company shall pay to (a) Employee’s spouse, or
      (b) the executors under Employee’s last will and testament duly admitted to
      probate within one (1) year of his death, or (3) Employee’s heirs at law, the
      compensation which otherwise would be payable to Employee under Section 3 hereof
      for a period of sixty (60) days following the date on which the death occurs.
      

    


    
      
        
        

      

      
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    8.
       Confidential
      Information of the Company.
      As used
      in this Agreement, the term "Confidential Information" means any and all
      confidential, proprietary or secret information, including that conceived or
      developed by Employee, applicable to or in any way related to: (a) the present
      or future business of the Company; (b) all marketing, financial, and accounting
      information of the Company; or (c) the business of any customer or vendor of
      the
      Company. Such Confidential Information of the Company includes, by way of
      example and without limitation, the identities of the Company's clients, trade
      secrets, formulas, data, program documentation, business plans, bank accounts,
      account balances, financial statements, inventions, techniques, all plans or
      strategies for marketing, development and pricing, and all information
      concerning existing or potential customers or vendors.

    


    9.
       Protection
      of the Company's Confidential Information.
      Employee acknowledges that the Confidential Information of the Company is a
      special, valuable, and unique asset of the Company. Employee agrees at all
      times
      during and after Employee's employment not to disclose for any purpose and
      to
      keep in strict confidence and trust all of such Confidential Information unless
      and until either Employee becomes aware that the Company is no longer treating
      such information as Confidential Information or Employee becomes aware of
      substantially the same information from a non-confidential source that has
      a
      bona fide and lawful right to the information. Employee agrees otherwise not
      to
      use, directly or indirectly, any Confidential Information other than in the
      course of performing duties as an employee of Company, nor will Employee
      directly or indirectly disclose any Confidential Information or anything
      relating to it to any person or entity, except with the Company's consent,
      as
      may be necessary to the performance of Employee's duties as an employee of
      the
      Company. Employee will abide by the Company’s policies and rules established
      from time to time by the Company for the protection of its Confidential
      Information.

    


    10.
       Return
      of Materials.
      Upon
      termination of Employee's employment with the Company for any reason, Employee
      shall promptly return to the Company all documents, records, notebooks, magnetic
      tapes, disks, computers or other materials, including all copies, in Employee's
      possession or control which contain Confidential Information of the Company
      or
      any other information concerning the Company, its finances, products, service
      or
      customers, whether prepared by the Employee or others. Employee shall not erase
      and/or purge any information contained in the Company’s computers when
      Employee's employment has terminated or a demand has been made for return of
      said computers, whichever is earlier.

    


    11.
       Expense
      Reimbursement.
      During
      the employment term, to the extent that such expenditures satisfy the criteria
      of the Internal Revenue Code for deductibility by the Company for federal income
      tax purposes as ordinary and necessary business expenses, the Company shall
      reimburse Employee for reasonable business expenses, including travel, made
      and
      substantiated in accordance with the policies and procedures established from
      time to time by the Company with respect to Company's other executive and
      managerial employees.

    


    12.
       Proprietary
      Information and Inventions Agreement.
      Employee
      and Company agree that the existing Proprietary Information and Inventions
      Agreement between Company and Employee remains in effect. 

    


    
      
        
        

      

      
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    13.
       Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California. Each party hereby submits to the exclusive jurisdiction
      and
      venue of the Superior Court of the State of California for the County of San
      Luis Obispo for purposes of any legal or equitable action or proceeding arising
      out of this Agreement.

    


    14.
       Notices.
      Any
      notice to be given to the Company under the terms of this Agreement shall be
      addressed to the Company at the address of its principal place of business,
      as
      follows: 825
      Buckley Road, San Luis Obispo, California 93401.  Any
      notice to be given to the Employee shall be addressed to him at the home address
      last shown on the records of the Company, or at such other address as either
      party may hereafter designate in writing to the other. Any such notice shall
      be
      deemed to have been duly given when enclosed in a properly sealed and addressed
      envelope, personally delivered or registered or certified, and deposited
      (postage and registry or certification fee prepaid) in a post office or branch
      post office regularly maintained by the United States Government.

    


    15.
       Waiver.
      Either
      party's failure to enforce any provision of this Agreement shall not in any
      way
      be construed as a waiver of any such provision, or prevent that party thereafter
      from enforcing each and every other provision of this Agreement

    


    16.
       Entire
      Agreement; Counterparts.
      This
      Agreement may be modified only by a duly authorized and executed writing, signed
      by an officer of the Company authorized by Company's Board of Directors and
      by
      Employee. This Agreement may be executed in two or more counterparts, each
      of
      which shall be deemed an original but all of which shall constitute one and
      the
      same agreement.

    


    17.
       Severability.
      To the
      extent a provision of this Agreement shall be invalid or unenforceable, it
      shall
      be considered deleted from the Agreement and the remainder of this Agreement
      shall be unaffected and shall continue in full force and effect. Notwithstanding
      the foregoing, in the event a provision of this Agreement is unenforceable
      because it is over-broad, then such provision shall be limited to the extent
      necessary to make it enforceable under the applicable law and enforced as so
      limited. Employee acknowledges the uncertainty of the law in this respect and
      expressly stipulates that this Agreement be given the construction which renders
      its provisions valid and enforceable to the maximum extent (not exceeding its
      express terms) possible under the applicable law. 

    


    18.
       Enforcement.
      Company
      and Employee recognize that under this Agreement, Employee is obligated to
      render personal services of a special, unique, unusual and extraordinary
      character, which gives this Agreement peculiar value. The Employee agrees that
      a
      breach by him of this Agreement, including its covenants, could not reasonably
      or adequately be compensated in damages in an action at law, and that Company
      shall be entitled to injunctive relief, which may include but shall not be
      limited to restraining the Employee from rendering any service which could
      breach this Agreement.

    


    19.
       Mediation.
      The
      parties agree to mediate any dispute or claim arising out of or relating to
      this
      Agreement, including the interpretation, application of any provision in this
      Agreement. Mediation shall take place within thirty (30) days of written notice
      in accordance with the provisions in this Agreement for notice being served
      on
      the other party. The mediator shall be a neutral mediator from a recognized
      mediation service. The fees and expenses of mediation shall be borne evenly
      by
      the parties. Evidence of anything said, any admission made, or any documents
      prepared in the course of the mediation shall not be admissible in evidence,
      or
      subject to discovery in any arbitration or court action, pursuant to Evidence
      Code §1152.5. If any party commences an arbitration or court proceeding based
      upon a dispute or claim to which this paragraph applies without first attempting
      to resolve the matter through mediation, then such party shall not be entitled
      to recover attorneys' fees, even if it would otherwise be available to that
      party in any such arbitration or court proceeding. 

    


    
      
        
        

      

      
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    20.
       Arbitration.
      Any
      action to resolve disputes with respect to this Agreement shall be settled
      by
      arbitration in accordance with California Code of Civil Procedure §§ 1280
      through 1294.2 and any successor provisions thereto. Arbitration shall be the
      exclusive dispute resolution process for disputes with respect to this
      Agreement. Any party may commence arbitration by sending a written demand for
      arbitration to the other party. Such demand shall set forth the nature of the
      matter to be resolved by arbitration. The place of arbitration shall be in
      the
      County of San Luis Obispo, State of California. The substantive law of the
      State
      of California shall be applied by the arbitrator to the resolution of the
      dispute. The Employer shall pay all costs of arbitration. The prevailing party
      shall be entitled to reimbursement of attorneys' fees and expenses incurred
      in
      connection with the arbitration. All decisions of the arbitrator shall be final,
      binding, and conclusive on all parties. Judgment may be entered upon any such
      decision in accordance with applicable law in any court having jurisdiction
      over
      the dispute.

    


    21.
       Survival.
      The
      parties expressly acknowledge and agree that the provisions of this Agreement
      which, by their express or implied terms, extend beyond the termination of
      Employee's employment hereunder, including without limitation the obligations
      incurred under Sections 8, 9, 10, 12, 18 and 19 shall continue in full force
      and
      effect notwithstanding Employee's termination of employment hereunder or the
      termination of this Agreement.

    


    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
      duly authorized Officer and Employee has executed this Agreement as of the
      day
      and year last written below.

    


    EMPLOYEE:

     

    /s/
      Alan Strasbaugh

      
        

      

    

    Alan
      Strasbaugh

    


    Date:
      May
      30, 2007

    


    


    COMPANY:

    


    STRASBAUGH,
      a California corporation

    


    By:
      /s/ Chuck Schillings            

     

                    Title: 
      President & CEO

    


    Date:
      May
      29, 2007

     

     

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