EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
AGREEMENT (the “Agreement”) is to be effective as of April 15, 2009 (the
“Effective Date”), between Health Discovery Corporation (the “Company”), and R.
Xxxxx Xxxxx (the “Executive”).
INTRODUCTION
The
Company and the Executive now desire to enter into this Agreement as to the
terms of his employment by the Company.
NOW, THEREFORE, the parties
agree as follows:
1.
Terms and Conditions
of Employment.
(a) Employment. During
the Term, Company will employ the Executive, and the Executive will serve as the
President and General Counsel of the Company on a full-time basis and will have
such responsibilities and authority as may from time to time be assigned to the
Executive by the CEO of the Company. Executive shall be responsible
for: strategic direction and strategic alliances (in conjunction with
the CEO and the Board of Directors of the Company); all business operations of
the Company including but not limited to financial management, controller,
financial systems management and preparation of all documents required of the
Company by the Securities and Exchange Commission; and such customary,
appropriate and reasonable executive duties as are usually performed by a
general counsel. In this capacity, Executive will provide services to
the Company and be privy to the Company’s Confidential Information and Trade
Secrets. The Executive will report to the CEO of the Company.
Executive shall serve on the Board of Directors without additional compensation
beyond that set forth in this Agreement, and shall continue to serve for so long
as he is thereafter elected to such position by the Company’s stockholders. The
Executive’s primary office will be at the Company’s headquarters in such
geographic location within the United States as may be determined by the
Company.
(b) Exclusivity. Throughout
the Executive’s employment hereunder, the Executive shall devote substantially
all of the Executive’s time, energy and skill during regular business hours to
the performance of the duties of the Executive’s employment, shall faithfully
and industriously perform such duties, and shall diligently follow and implement
all management policies and decisions of the Company; provided, however, that
this provision is not intended to prevent the Executive from managing his
investments, or engaging in other activities outside of the Company, whether or
not compensable, so long as he gives his duties to the Company first priority
and such activities do not interfere with his performance of duties for the
Company. Notwithstanding the foregoing, other than with regard to the
Executive’s duties to the Company, the Executive will not accept any other
employment during the Term, perform any consulting services during the Term, or
serve on the board of directors or governing body of any other business, except
with the prior written consent of the Board of Directors. Further,
the Executive has disclosed on Exhibit A hereto, all
of his nonpublic company bio-discovery related investments, and agrees during
the Term not to make any investments during the Term hereof except as a passive
investor. The Executive agrees during the Term not to own directly or
indirectly equity securities of any public healthcare related company (excluding
the Company) that represents five percent (5%) or more of the value of voting
power of the equity securities of such company.
2.
Compensation.
(a) Base
Salary. The Company shall pay the Executive base salary of
$120,000.00 per annum (the “Annual Base Salary”), which base salary will be
subject to review effective at least annually thereafter by the Company for
possible increases. The base salary shall be payable in equal installments, no
less frequently than twice per month, in accordance with the Company’s regular
payroll practices.
(b) Bonus. Executive
shall be eligible to receive annually a target variable incentive bonus (the
"Incentive Bonus") of one hundred percent (100%) of Employee’s then current
annual salary, based on objectives jointly determined by Executive and the
Chairman and CEO. This Incentive Bonus is to be paid to Executive no
later than thirty (30) days following the closing of the Company’s annual
audited financial statements for services performed during each calendar year
subject to the Term(s) of this Agreement. For his services performed
in calendar year ending 2009, the Incentive Bonus may be paid in cash, stock,
enhanced employee benefits or some combination thereof, based on the Company’s
preference and in accordance with law. For subsequent calendar years,
the Incentive Bonus shall be payable in cash.
(c) Equity
Compensation. The Executive shall receive options to acquire
shares of the Company’s Common Stock at an exercise price per share equal to the
greater of the Fair Market Value (as defined in the option agreement referenced
herein) of a share of the Company’s Common Stock or $0.08, which shall vest
pursuant to the vesting schedule set forth on Exhibit B hereto and which grant
shall be evidenced by an option agreement, the terms of which are incorporated
herein by reference, in form and substance reasonably satisfactory to the
Company and Executive.
(d) Expenses. The
Executive shall be entitled to be reimbursed in accordance with Company policy
in effect for reasonable and necessary expenses incurred by the Executive in
connection with the performance of the Executive’s duties of employment
hereunder; provided, however, the Executive shall, as a condition of such
reimbursement, submit verification of the nature and amount of such expenses in
accordance with the reasonable reimbursement policies from time to time adopted
by the Company. Any
travel by Executive on
behalf of the Company shall be at the Company’s expense and shall include, but
not be limited to, all costs for the Executive’s transportation, lodging, meals,
and with respect to air fare at lowest available nonstop coach rates for
domestic flights and at lowest available nonstop business class rates for all
international flights.
(e) Paid Time
Off. Executive
shall be entitled to fifteen (15) paid vacation days during the calendar year
from January 1 to December 31. All vacation must be taken by December
31 in the calendar year in which such vacation is earned.
(f)
Benefits.
(i) The Company shall at all times during
the Term pay all premiums for health insurance benefits for Executive and his
dependants with coverage and premiums available to other regular full-time
employees of the Company; provided, however, Executive shall be responsible for
all deductibles, co-payment requirements or similar obligations under such
health insurance, and provided, further, that the Company’s obligations under
this Section 2(f)(i) shall not exceed twenty percent (20%) of the Executive’s
Annual Base Salary.
(ii) In addition to the benefits payable to
the Executive specifically described herein, the Executive shall be entitled to
such benefits as generally may be made available to all other executives of the
Company from time to time as approved by the Board of Directors of the Company;
provided, however, that nothing contained herein shall require the establishment
or continuation of any particular plan or program; provided, further, that
Executive shall be entitled to participate in any stock option or other equity
plan otherwise made available to other executives of the
Company.
2
(g) Director
& Officer Insurance. The Company, at its expense, shall maintain
director and officer insurance covering Executive at levels consistent with past
practice with a reputable carrier. The Executive shall be entitled to
indemnification, including advancement of expenses (if applicable), in
accordance with and to the fullest extent permitted by law, and as provided by
the Company’s bylaws and articles of incorporation, and any separate
indemnification agreement, if any.
(h) Reimbursement
Conditions. All expenses eligible for reimbursement under this
Agreement must be incurred by the Executive during the Term of this Agreement to
be eligible for reimbursement. All reimbursements shall be paid as soon as
administratively practicable, but in no event shall any reimbursement be paid
after thirty days following the last day of the calendar year in which the
expense was incurred, nor shall the amount of reimbursable expenses incurred in
one taxable year affect the expenses eligible for reimbursement in any other
taxable year.
(i) Withholding. All
payments pursuant to this Agreement shall be reduced for any applicable state,
local, or federal tax withholding obligations.
3.
Term, Termination and
Termination Payments.
(a) Term. The
term of this Agreement shall begin as of the Effective Date. It shall
continue for a period of eighteen (18) months from the Effective Date hereof or
until sooner terminated pursuant to Section 3(b) hereof (the “Initial
Term”). Thereafter, the employment term shall automatically renew and
continue for successive twelve (12) month periods (each a “Renewal Term”) unless
terminated pursuant to this Agreement or by either Party upon ninety (90)
calendar days’ written notice of intent not to renew this Agreement provided
prior to the expiration of the Initial Term or the then current Renewal Term, as
the case may be. The Initial Term together with any Renewal Term(s)
shall be referred to herein as the “Term.”
(b) Termination. This
Agreement and the employment of the Executive by the Company hereunder shall
only be terminated: (i) by expiration of the Term; (ii) by the Company
without Cause; (iii) by the Executive for Good Reason; (iv) by the
Company or the Executive due to the Disability of the Executive; (v) by the
Company for Cause; (vi) by the Executive for other than Good Reason or
Disability, upon at least ninety (90) days prior written notice to the Company;
or (vii) upon the death of the Executive. Notice of termination by
any party shall be given prior to termination in writing and shall specify the
basis for termination and the effective date of termination. Further,
notice of termination for Cause by the Company or Good Reason by the Executive
shall specify the facts alleged to constitute termination for Cause or Good
Reason, as applicable. Except as provided in Section 3(c), the
Executive shall not be entitled to any payments or benefits after the effective
date of the termination of this Agreement, except for base salary pursuant to
Section 2(a) accrued up to the effective date of termination, any unpaid earned
and accrued Incentive Bonus, if any, pursuant to Section 2(b) (unless
termination is by the Executive prior to the end of the Term for other than Good
Reason), pay for accrued but unused vacation that the Company is legally
obligated to pay Executive, if any, and only if the Company is so obligated, as
provided under the terms of any other employee benefit and compensation
agreements or plans applicable to the Executive, expenses required to be
reimbursed pursuant to Section 2(d), and any rights to payment the Executive has
under Section 2(g).
3
(c) Termination by the Company
without Cause or by the Executive for Good Reason.
(i) If
the employment of the Executive is terminated by the Company without Cause or by
the Executive for Good Reason and such termination constitutes a Termination of
Employment, the Company will pay the Executive (A) such maximum Incentive Bonus
to which Executive would have been entitled had Executive remained in the employ
of the Company the later of the entire calendar year in which such termination
occurs, or the end of the Term, (B) his base salary pursuant to Section 2(a)
hereof for the remainder of the Term plus ninety (90) days, and
(C) an amount equal to the actual cost of ninety (90) days of the Executive’s
health insurance premiums pursuant to Section 2(f) hereof, or if applicable,
COBRA premium payments, commencing with the COBRA payment next due after
termination, should the Executive elect COBRA (the “Continuing
Benefit”). Such amount shall be paid in arrears in
substantially equal installments not less frequently than monthly over the
remainder of the Term commencing within thirty (30) days following the effective
date of termination; provided, however, if the Executive is a “specified
employee” within the meaning of Section 409A of the Internal Revenue Code, as
amended (the “Code”), at the date of his Termination of Employment, then such
portion of the payments that would result in a tax under Code Section 409A if
paid during the first six (6) months after Termination of Employment shall be
withheld, starting with the payments latest in time during such six (6) month
period, and paid to the Executive during the seventh month following the date of
his Termination of Employment. Notwithstanding the foregoing, if the
total payments to be paid to the Executive hereunder, along with any other
payments to the Executive, would result in the Executive being subject to the
excise tax imposed by Code Section 4999, the Company shall reduce the aggregate
payments to the largest amount which can be paid to the Executive without
triggering the excise tax, but only if and to the extent that such reduction
would result in the Executive retaining larger aggregate after-tax
payments. The determination of the excise tax and the aggregate
after-tax payments to be received by the Executive will be made by the
Company. If payments are to be reduced, the payments made latest in
time will be reduced first.
(ii) If
the original Term is not extended or the Company or the Executive terminates the
Executive’s employment in accordance with the Agreement upon or following
expiration of the Term, such termination shall not be deemed in and of itself to
be a termination of the Executive’s employment by the Company without Cause or a
resignation by Executive for Good Reason.
(iii) Notwithstanding
any other provision hereof, as a condition to the payment of the amounts in this
Section, the Executive shall be required to execute and not revoke within the
revocation period provided therein, the Release.
(d) Survival. The
covenants in this Section 3 hereof shall survive the termination of this
Agreement and shall not be extinguished thereby.
4
4.
Ownership and
Protection of Proprietary Information.
(a) Confidentiality. All
Confidential Information and Trade Secrets and all physical embodiments thereof
received or developed by the Executive while employed by the Company are
confidential to and are and will remain the sole and exclusive property of the
Company. Except to the extent necessary to perform the duties
assigned by the Company hereunder, the Executive will hold such Confidential
Information and Trade Secrets in trust and strictest confidence, and will not
use, reproduce, distribute, disclose or otherwise disseminate the Confidential
Information and Trade Secrets or any physical embodiments thereof and may in no
event take any action causing or fail to take the action necessary in order to
prevent, any Confidential Information and Trade Secrets disclosed to or
developed by the Executive to lose its character or cease to qualify as
Confidential Information or Trade Secrets.
(b) Return of Company
Property. Upon request by the Company, and in any event upon
termination of this Agreement for any reason, as a prior condition to receiving
any final compensation hereunder (including any payments pursuant to
Section 3 hereof), the Executive will promptly deliver to the Company all
property belonging to the Company, including, without limitation, all
Confidential Information and Trade Secrets (and all embodiments thereof) then in
the Executive’s custody, control or possession.
(c) Survival. The
covenants of confidentiality set forth herein will apply on and after the date
hereof to any Confidential Information and Trade Secrets disclosed by the
Company or developed by the Executive while employed or engaged by the Company
prior to or after the date hereof. The covenants restricting the use
of Confidential Information will continue and be maintained by the Executive for
a period of two years following the termination of this
Agreement. The covenants restricting the use of Trade Secrets will
continue and be maintained by the Executive following termination of this
Agreement for so long as permitted by the governing law.
5.
Non-Competition and
Non-Solicitation Provisions.
(a) The
Executive agrees that during the Applicable Period, the Executive will not
(except on behalf of or with the prior written consent of the Company, which
consent may be withheld in Company’s sole discretion), within the Area either
directly or indirectly, on his own behalf, or in the service of or on behalf of
others, provide managerial services or management consulting services
substantially similar to those Executive provides for the Company to any
Competing Business. The Executive acknowledges and agrees that the
Business of the Company is conducted in the Area.
(b) The
Executive agrees that during the Applicable Period, he will not, either directly
or indirectly, on his own behalf or in the service of or on behalf of others
solicit any individual or entity which is an actual or, to his knowledge,
actively sought prospective client of the Company or any of its Affiliates
(determined as of date of termination of employment) with whom he had material
contact while he was an Executive of the Company, for the purpose of offering
services substantially similar to those offered by the Company.
(c) The
Executive agrees that during the Applicable Period, he will not, either directly
or indirectly, on his own behalf or in the service of or on behalf of others,
solicit for employment with a Competing Business any person who is a management
level employee of the Company or an Affiliate with whom Executive had contact
during the last year of Executive’s employment with the Company. The
Executive shall not be deemed to be in breach of this covenant solely because an
employer for whom he may perform services may solicit, divert, or hire a
management level employee of the Company or an Affiliate provided that Executive
does not engage in the activity proscribed by the preceding
sentence.
5
(d) The
Executive agrees that during the Applicable Period, he will not make any
statement (written or oral) that could reasonably be perceived as disparaging to
the Company or any person or entity that he reasonably should know is an
Affiliate of the Company.
(e) In
the event that this Section 5 is determined by a court which has jurisdiction to
be unenforceable in part or in whole, the court shall be deemed to have the
authority to strike any unenforceable provision, or any part thereof or to
revise any provision to the minimum extent necessary to be enforceable to the
maximum extent permitted by law.
(f) The
provisions of this Section 5 shall survive termination of this
Agreement.
6.
Remedies and
Enforceability.
The
Executive agrees that the covenants, agreements, and representations contained
in Sections 4 and 5 hereof are of the essence of this Agreement; that each of
such covenants are reasonable and necessary to protect and preserve the
interests and properties of the Company; that irreparable loss and damage will
be suffered by the Company should the Executive breach any of such covenants and
agreements; that each of such covenants and agreements is separate, distinct and
severable not only from the other of such covenants and agreements but also from
the other and remaining provisions of this Agreement; that the unenforceability
of any such covenant or agreement shall not affect the validity or
enforceability of any other such covenant or agreements or any other provision
or provisions of this Agreement; and that, in addition to other remedies
available to it, including, without limitation, termination of the Executive’s
employment for Cause, the Company shall be entitled to seek both temporary and
permanent injunctions to prevent a breach or contemplated breach by the
Executive of any of such covenants or agreements.
7.
Notice.
All
notices, requests, demands and other communications required hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if
mailed, by United States certified or registered mail, prepaid to the party to
which the same is directed at the following addresses (or at such other
addresses as shall be given in writing by the parties to one
another):
If to the
Company:
0 Xxxx
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
If to the
Executive:
0
Xxxxxxxxx Xxxx
Xxxxxxxx,
XX 00000
Notices
delivered in person shall be effective on the date of
delivery. Notices delivered by mail as aforesaid shall be effective
upon the fourth calendar day subsequent to the postmark date
thereof.
8.
Miscellaneous.
(a) Assignment. The
rights and obligations of the Company under this Agreement shall inure to the
benefit of the Company’s successors and assigns. This Agreement may
be assigned by the Company to any legal successor to the Company’s business or
to an entity that purchases all or substantially all of the assets of the
Company, but not otherwise without the prior written consent of the
Executive. In the event the Company assigns this Agreement as
permitted by this Agreement and the Executive remains employed by the assignee,
the “Company” as defined herein will refer to the assignee and the Executive
will not be deemed to have terminated his employment hereunder until the
Executive terminates his employment with the assignee. The Executive
may not assign this Agreement.
6
(b) Waiver. The
waiver of any breach of this Agreement by any party shall not be effective
unless in writing, and no such waiver shall constitute the waiver of the same or
another breach on a subsequent occasion.
(c) Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Georgia. The
parties agree that any appropriate state or federal court located in Chatham
County, Georgia shall have jurisdiction of any case or controversy arising under
or in connection with this Agreement and shall be a proper forum in which to
adjudicate such case or controversy. The parties consent to the
jurisdiction of such courts.
(d) Entire
Agreement. This Agreement and other agreements referenced
herein embody the entire agreement of the parties hereto relating to the subject
matter hereof and supersede all oral agreements, and to the extent inconsistent
with the terms hereof, all other written agreements.
(e) Amendment. This
Agreement may not be modified, amended, supplemented or terminated except by a
written instrument executed by the parties hereto.
(f) Severability. Each
of the covenants and agreements hereinabove contained shall be deemed separate,
severable and independent covenants, and in the event that any covenant shall be
declared invalid by any court of competent jurisdiction, such invalidity shall
not in any manner affect or impair the validity or enforceability of any other
part or provision of such covenant or of any other covenant contained
herein.
(g) Captions and Section
Headings. Except as set forth in Section 9 hereof,
captions and section headings used herein are for convenience only and are not a
part of this Agreement and shall not be used in construing it.
(h) Dispute
Resolution. If a dispute arises between Company and Executive
regarding the interpretation of this Agreement, the parties agree to negotiate
in good faith regarding a resolution of the issues involved for at least thirty
days prior to either party initiating proceedings to enforce their rights.
Within sixty (60) days after a final determination (excluding any appeals) is
made with respect to the proceedings, unless the parties agree otherwise, the
losing party will reimburse the winning party’s reasonable attorney’s fees and
costs incurred in the litigation. ALL DISPUTES ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR TO COMPANY’S EMPLOYMENT OF EXECUTIVE OR THE
TERMINATION OF EXECUTIVE’S EMPLOYMENT SHALL BE SUBMITTED EXCLUSIVELY TO BINDING
ARBITRATION IN SAVANNAH, GEORGIA, PURSUANT TO THE NATIONAL RULES FOR THE
RESOLUTION OF EMPLOYMENT DISPUTES OF THE AMERICAN ARBITRATION
ASSOCIATION, provided however that Company shall be entitled to
injunctive relief from any court of jurisdiction against Executive’s breach of
any covenant in Articles 4 and 5, and further provided that this Agreement shall
not require arbitration of any claim for workers’ compensation benefits or any
claim for unemployment compensation. Executive understands that agreeing to
arbitration waives the right to a jury trial. Arbitral awards shall be
enforceable by any court of competent jurisdiction.
7
9.
Definitions.
(a) “Affiliate” means any
person, firm, corporation, partnership, association or entity that, directly or
indirectly or through one or more intermediaries, controls, is controlled by or
is under common control with the Company.
(b) “Applicable Period”
means the period commencing as of the date of this Agreement and ending twelve
months after the termination of the Executive’s employment with the Company or
any of its Affiliates.
(c) “Area” means the
United States.
(d) “Business of the
Company” means any business that uses or provides consulting services
related to support vector machines or fractal genomic modeling.
(e) “Cause” the occurrence
of any of the following events:
(i) willful failure or refusal to perform
the duties as set forth in Section 1(a) as determined by the Board of Directors
or implement a directive from the Board of Directors, in each case remaining
uncured for a period of fourteen (14) days after receipt of written notice from
the Board of Directors specifying such failure or refusal;
(ii) intentional
disclosure by the Executive to an unauthorized person of Confidential
Information or Trade Secrets, which causes material harm to the
Company;
(iii) any
act by the Executive of fraud against, material misappropriation from, or
significant dishonesty to either the Company or an Affiliate, or any other
party, but in the latter case only if in the reasonable opinion of at least
two-thirds of the members of the Board of Directors of the Company (excluding
the Executive), such fraud, material misappropriation, or significant dishonesty
could reasonably be expected to have a material adverse impact on the Company or
its Affiliates;
(iv) conviction of, or plea of nolo
contendere to, a felony which adversely and materially affects the
Company; or
(v) a
material breach of this Agreement by the Executive, provided that the nature of
such breach shall be set forth with reasonable particularity in a written notice
to the Executive who shall have ten (10) days following delivery of such notice
to cure such alleged breach, provided that such breach is, in the reasonable
discretion of the Board of Directors, susceptible to a cure.
(f) “Competing Business”
means the entities listed below and any person, firm, corporation, joint
venture, or other business that is engaged in the Business of the
Company:
(g) “Confidential
Information” means data and information relating to the Business of the
Company or an Affiliate (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Executive or of which the Executive became
aware as a consequence of or through his relationship to the Company or an
Affiliate and which has value to the Company or an Affiliate and is not
generally known to its competitors. Confidential Information shall
not include any data or information that has been voluntarily disclosed to the
public by the Company or an Affiliate (except where such public disclosure has
been made by the Executive without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means without breach of any obligations of confidentiality owed
to the Company or any of its Affiliates by the Executive.
8
(h) “Disability” means the
inability of the Executive to perform the material duties of his position
hereunder due to a physical, mental, or emotional impairment, for a ninety (90)
consecutive day period or for aggregate of one hundred eighty (180) days during
any three hundred sixty-five (365) day period.
(i) “Good Reason” means
the occurrence of any of the events listed in either (i), (ii) or (iii)
below:
(i) (A) the
Company materially breaches this Agreement, including without limitation, a
material diminution of the Executive’s responsibilities as President and General
Counsel, as reasonably modified by the Board of Directors from time to time
hereafter, such that the Executive would no longer have responsibilities
substantially equivalent to those of other presidents and general counsels at
companies with similar revenues and market capitalization;
(B) the Executive
gives written notice to the Company of the facts and circumstances constituting
the breach of the Agreement within ten (10) days following the occurrence of the
breach;
(C) the
Company fails to remedy the breach within ten (10) days following the
Executive’s written notice of the breach; and
(D) the
Executive terminates his employment within ten (10) days following the Company’s
failure to remedy the breach; or
(ii) (A) the
Company requires the Executive to relocate the Executive’s primary place of
employment to a new location, that is more than fifty (50) miles (calculated
using the most direct driving route) from its current location, without the
Executive’s consent;
(B) the
Executive gives written notice to the Company within ten (10) days following
receipt of notice of relocation of his objection to the relocation;
(C) the
Company fails to rescind the notice of relocation within ten (10) days following
the Executive’s written notice; and
(D) the
Executive terminates his employment within ten (10) days following the Company’s
failure to rescind the notice.
(j) “Release” means a
comprehensive release, covenant not to xxx, and non-disparagement agreement from
the Executive in favor of the Company, its executives, officers, directors,
Affiliates, and all related parties, in the form attached hereto as Exhibit
C.
(k)
“Term” has the
meaning as set forth in Section 3(a) hereof.
9
(l) “Termination of
Employment” means
either that (a) the Executive has ceased to perform any services for the Company
and all affiliated companies that, together with the Company, constitute the
“service recipient” within the meaning of Section 409A of the Code and the
regulations thereunder (collectively, the “Service Recipient”) or (b) the level
of bona fide services the Executive performs for the Service Recipient after a
given date (whether as an employee or as an independent contractor) permanently
decreases (excluding a decrease as a result of military leave, sick leave, or
other bona fide leave of absence if the period of such leave does not exceed six
months, or if longer, so long as the Executive retains a right to reemployment
with the Service Recipient under an applicable statute or by contract) to no
more than twenty percent (20%) of the average level of bona fide services
performed for the Service Recipient (whether as an employee or an independent
contractor) over the immediately preceding 36-month period.
(m) “Trade Secrets” means
data and information relating to the Business of the Company or an Affiliate
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans or lists of actual or
potential customers or suppliers which (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
10
IN WITNESS WHEREOF, the
Company and the Executive have each executed and delivered this Agreement as of
the date first shown above.
COMPANY:
|
|||
Health
Discovery Corporation
|
|||
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | ||
Xxxxxxx
X. Xxxxxxxx, Chairman and CEO
|
|||
THE
EXECUTIVE:
|
|||
/s/ R. Xxxxx Xxxxx | |||
R.
Xxxxx Xxxxx
|
EXHIBIT
A
None
|
|
EXHIBIT
B
Vesting Date
|
Number of Options
|
|
April
15, 2009
|
1,000,000
|
|
January
1, 2010
|
1,500,000
|
|
September
15, 2010
|
2,000,000
|
Each
portion of the option identified under the “Number of Options” column above
shall vest only if and when (1) the Executive has been continuously employed by
the Company through the applicable Vesting Date, and (2) with respect
to the options that have Vesting Dates of January 1 and September 15, 2010 the
options shall not vest until either the Company has (i) cash on hand in excess
of $800,000, or (ii) a positive, trailing 90-day EBITDA, or (iii) raised an
additional $1,000,000 in capital from new investments, excluding any proceeds
from the exercise of any warrants or options.
Notwithstanding
the foregoing, in the event of either (i) a termination of Executive by the
Company without Cause or by the Executive for Good Reason, or (ii) a Change in
Control occurs while the Executive is employed by the Company, the Executive
shall immediately become fully vested in all of the above referenced option
shares (as adjusted for any changes in capitalization as provided in any
applicable option agreement), provided that upon a Change of Control the per
share consideration received by shareholders of the Company on account of the
Change in Control is equal to or greater than $0.10 per share of Common Stock
(as adjusted for changes in capitalization as provided in any applicable option
agreement). Change in Control”
means the consummation of (i) a merger, consolidation, share exchange,
combination, reorganization, or like transaction involving the Company in which
the shareholders of the Company immediately prior to such transaction do not own
at least fifty percent (50%) of the value or voting power of the issued and
outstanding capital stock of the Company or its successor immediately after such
transaction, or (ii) the sale or transfer (other than as security for the
Company's obligations) of all or substantially all of the assets of the Company
in any transaction or a series of related transactions, in which the Company,
any corporation controlled by the Company, or the shareholders of the Company
immediately prior to the transaction do not own at least fifty percent (50%) of
the value or voting power of the issued and outstanding equity securities of the
acquirer immediately after the transaction.
EXHIBIT
C
RELEASE,
AGREEMENT PURSUANT TO
This
Agreement (this “Agreement”) is made this ___ day of _____, 200_, by
_______________ (the “Employer”) and ________________ (the
“Employee”).
Introduction
Employee
and the Employer entered into an Employment Agreement dated ________, 200_ (the
“Employment Agreement”).
The
Employment Agreement requires that as a condition to the Employer’s obligation
to pay payments and benefits under Section 3(c) of the Employment Agreement (the
“Severance Benefits”), Employee must provide a release and agree to certain
other conditions as provided herein.
NOW,
THEREFORE, the parties agree as follows:
1.
|
Employee
has been offered twenty-one (21) days from receipt of this Agreement
within which to consider this Agreement. The effective date of this
Agreement shall be the date eight (8) days after the date on which
Employee signs this Agreement (“the Effective Date”). For a period of
seven (7) days following Employee’s execution of this Agreement, Employee
may revoke this Agreement, and this Agreement shall not become effective
or enforceable until such seven (7) day period has expired. Employee must
communicate the desire to revoke this Agreement in
writing. Employee understands that he or she may sign the
Agreement at any time before the expiration of the twenty-one (21) day
review period. To the degree Employee chooses not to wait
twenty-one (21) days to execute this Agreement, it is because Employee
freely and unilaterally chooses to execute this Agreement before that
time. Employee’s signing of the Agreement triggers the
commencement of the seven (7) day revocation period.
|
2.
|
In
exchange for Employee’s execution of this Agreement and in full and
complete settlement of any claims as specifically provided in this
Agreement, the Employer will provide Employee with the Severance
Benefits.
|
3.
|
Employee
acknowledges and agrees that this Agreement is in compliance with the Age
Discrimination in Employment Act and the Older Workers Benefit Protection
Act and that the releases set forth in this Agreement shall be applicable,
without limitation, to any claims brought under these
Acts.
|
The
release given by Employee in this Agreement is given solely in exchange
for the consideration set forth in Section 2 of this Agreement
and such consideration is in addition to anything of value that Employee
was entitled to receive prior to entering into this
Agreement.
|
|
Employee
has been advised to consult an attorney prior to entering into this
Agreement and this provision of the Agreement satisfies the requirement of
the Older Workers Benefit Protection Act that Employee be so advised in
writing.
|
|
By
entering into this Agreement, Employee does not waive any rights or claims
that may arise after the date this Agreement is
executed.
|
4.
|
This
Agreement shall in no way be construed as an admission by the Employer
that it has acted wrongfully with respect to Employee or any other person
or that Employee has any rights whatsoever against the
Employer. The Employer specifically disclaims any liability to
or wrongful acts against Employee or any other person on the part of
itself, its employees or its agents.
|
5.
|
As
a material inducement to the Employer to enter into this Agreement,
Employee hereby irrevocably releases the Employer and each of the owners,
stockholders, predecessors, successors, directors, officers, employees,
representatives, attorneys, affiliates (and agents, directors, officers,
employees, representatives and attorneys of such affiliates) of the
Employer and all persons acting by, through, under or in concert with them
(collectively, the “Releasees”), from any and all charges, claims,
liabilities, agreements, damages, causes of action, suits, costs, losses,
debts and expenses (including attorneys’ fees and costs actually incurred)
of any nature whatsoever, known or unknown, including, but not limited to,
rights arising out of alleged violations of any contracts, express or
implied, any covenant of good faith and fair dealing, express or implied,
or any tort, or any legal restrictions on the Employer’s right to
terminate employees, or any federal, state or other governmental statute,
regulation, or ordinance, including, without limitation: (1) Title VII of
the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991
(race, color, religion, sex, and national origin discrimination); (2) the
Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981
(discrimination); (4) the Americans with Disabilities Act (disability
discrimination); (5) the Equal Pay Act; (6) the Age Discrimination in
Employment Act; (7) the Older Workers Benefit Protection Act; (6) Executive
Order 11246 (race, color, religion, sex, and national origin
discrimination); (7) Executive Order 11141 (age discrimination); (8)
Section 503 of the Rehabilitation Act of 1973 (disability discrimination);
(9) negligence; (10) negligent hiring and/or negligent retention;
(11) intentional or negligent infliction of emotional distress or
outrage; (12) defamation; (13) interference with employment;
(14) wrongful discharge; (15) invasion of privacy; or
(16) violation of any other legal or contractual duty arising under
the laws of the State of Maryland or the laws of the United States
(“Claim” or “Claims”), which Employee now has, or claims to have, or which
Employee at any time heretofore had, or claimed to have, or which Employee
at any time hereinafter may have, or claim to have, against each or any of
the Releasees, in each case as to acts or omissions by each or any of the
Releasees occurring up to and including the Effective
Date.
|
6.
|
The
release in the preceding paragraph of this Agreement does not apply to
(a) all benefits and awards (including without limitation cash and
stock components) which pursuant to the terms of any compensation or
benefit plans, programs, or agreements of the Employer are earned or
become payable, but which have not yet been paid, and (b) pay for
accrued but unused vacation that the Employer is legally obligated to pay
Employee, if any, and only if the Employer is so obligated,
(c) unreimbursed business expenses for which Employee is entitled to
reimbursement under the Employer’s policies, and (d) any rights to
indemnification that Employee has under any directors and officers or
other insurance policy the Employer maintains or under the bylaws and
articles of incorporation of the Company, and under any indemnification
agreement, if any.
|
7.
|
Employee
promises that he will not make statements disparaging to any of the
Releasees. Employee agrees not to make any statements about any
of the Releasees to the press (including without limitation any newspaper,
magazine, radio station or television station) without the prior written
consent of the Employer. The obligations set forth in the two
immediately preceding sentences will expire two years after the Effective
Date. Employee will also cooperate with the Employer and its
affiliates if the Employer requests Employee’s testimony. To
the extent practicable and within the control of the Employer, the
Employer will use reasonable efforts to schedule the timing of Employee’s
participation in any such witness activities in a reasonable manner to
take into account Employee’s then current employment, and will pay the
reasonable documented out-of-pocket expenses that the Employer
pre-approves and that Employee incurs for travel required by the Employer
with respect to those
activities.
|
2
9.
|
Except
as set forth in this Section, Employee agrees not to disclose the
existence or terms of this Agreement to anyone. However,
Employee may disclose it to a member of his immediate family or legal or
financial advisors if necessary and on the condition that the family
member or advisor similarly does not disclose these terms to
anyone. Employee understands that he will be responsible for
any disclosure by a family member or advisor as if he had disclosed it
himself. This restriction does not prohibit Employee’s
disclosure of this Agreement or its terms to the extent necessary during a
legal action to enforce this Agreement or to the extent Employee is
legally compelled to make a disclosure. However, Employee will
notify the Employer promptly upon becoming aware of that legal necessity
and provide it with reasonable details of that legal
necessity.
|
10.
|
Employee
has not filed or caused to be filed any lawsuit, complaint or charge with
respect to any Claim he releases in this Agreement. Employee
promises never to file or pursue a lawsuit, complaint or charge based on
any Claim released by this Agreement, except that Employee may participate
in an investigation or proceeding conducted by an agency of the United
States Government or of any state. Employee also has not
assigned or transferred any claim he is releasing, nor has he purported to
do so.
|
11.
|
The
Employer and Employee agree that the terms of this Agreement shall be
final and binding and that this Agreement shall be interpreted, enforced
and governed under the laws of the State of Maryland. The
provisions of this Agreement can be severed, and if any part of this
Agreement is found to be unenforceable, the remainder of this Agreement
will continue to be valid and effective.
|
12.
|
This
Agreement sets forth the entire agreement between the Employer and
Employee and fully supersedes any and all prior agreements or
understandings, written and/or oral, between the Employer and Employee
pertaining to the subject matter of this Agreement.
|
13.
|
Employee
is solely responsible for the payment of any fees incurred as the result
of an attorney reviewing this agreement on behalf of
Employee. In any litigation concerning the validity or
enforceability of this contract or in any litigation to enforce the
provisions of this contract, the prevailing party shall be entitled to
recover reasonable attorneys’ fees and costs, including court costs and
expert witness fees and
costs.
|
Employee’s
signature below indicates Employee’s understanding and agreement with all of the
terms in this Agreement.
Employee
should take this Agreement home and carefully consider all of its provisions
before signing it. Employee may take up to twenty-one (21) days to decide
whether Employee wants to accept and sign this Agreement. Also, if
Employee signs this Agreement, Employee will then have an additional
seven (7) days in which to revoke Employee’s acceptance of this Agreement
after Employee
has signed it. This Agreement will not be effective or enforceable,
nor will any consideration be paid, until after the seven (7) day
revocation period has expired. Again, Employee is free and encouraged to discuss
the contents and advisability of signing this Agreement with an attorney of
Employee’s choosing.
3
Employee
should read carefully. This agreement includes a release of all known
and unknown claims through the effective date. Employee is strongly
advised to consult with an attorney before executing this document.
IN
WITNESS WHEREOF, Employee and the Employer have executed this agreement
effective as of the date first written above.
EMPLOYEE | |||
Name
|
|||
Date
Signed
|
|||
EMPLOYER: | |||
By:
|
|||
Title:
|
4