EMPLOYMENT AGREEMENT
THIS
AGREEMENT is dated January 4th, 2008 (the “Effective
Date”)
by and
between RxElite, Inc., a Delaware corporation (“RxElite”)
and
Xx. Xxxx X. Xxxxxx (“Executive”).
In
consideration of the mutual covenants contained herein, and for such other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as
follows:
1. Employment
and Duties.
RxElite
hereby agrees to employ the Executive as the president of the Israeli company
RxLite Israel Ltd. (the “Company”), a fully owned subsidiary of RxElite, and
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth. During the Employment Period (as defined below),
Executive shall serve in the foregoing capacities and shall report to the Board
of Directors of RxElite (“Board”). Executive shall have those powers and duties
customarily associated with the foregoing positions of entities comparable
to
the Company and such other powers and duties as may be prescribed by the Board.
The intent of the parties is that the Company shall employ a full time Senior
Executive or facility manager based at the Company’s premises in Israel, and
until such time, the Executive’s duties will include such duties normally
fulfilled by a Senior Executive taking into account that the Executive may
be
based in the US. RxElite shall procure for the Executive the necessary working
visa for the US for the Term.
2. Term.
The
term of this Agreement (the “Term”)
shall
commence on the Effective Date and run for a term of 3 years, and may be
extended by the mutual agreement of both parties, unless Executive’s employment
is terminated as provided in Section 6 (the “Employment
Period”).
3. Extent
of Services.
During
the Term and any extension thereof, Executive shall devote his time and efforts
to the performance, to the best of his abilities, of such duties and
responsibilities, as described in Section 1 above. It is acknowledged that
the
time dedicated by the Executive may vary depending on the business of the
Company.
4. Compensation.
(a) Salary.
Executive shall be paid One Hundred and Ninety Thousand US Dollars ($190,000.00)
on an annualized basis (the “Base
Salary”)
in
accordance with RxElite’s normal payroll practices, and subject to all lawfully
required withholding. The base salary may be increased annually as determined
by
the Board in its sole discretion.
(b) Bonus.
In
addition to the Base Salary, Executive shall be entitled to a bonus of up to
thirty percent (30%) of his Base Salary. The Board and Executive will agree
upon
milestones for bonus achievement. The actual bonus amount will be determined
by
the Board in its absolute and sole discretion.
(c) Executive
Participation in RxElite’s Staff Benefits Plans.
(i) RxElite
shall include the Executive in such benefit plans and insurance policies as
RxElite provides from time to time to its highest ranking officers. In that
context, RxElite shall pay the medical insurance premiums for coverage of the
Executive and his family, as may be established from time to time by RxElite
with such carriers and such coverage and such terms and conditions as RxElite
may select. On or after the date hereof, RxElite shall be entitled to cause
Executive to participate in the cost of the foregoing medical insurance in
such
pro-rations as RxElite may decide in its sole and absolute discretion, as
applicable to the same level executive of RxElite.
(d) Expenses.
Executive shall be reimbursed by RxElite for all ordinary, reasonable, customary
and necessary expenses incurred by him in the performance of his duties and
responsibilities. Executive agrees to prepare documentation for such expenses
as
may be necessary for RxElite to comply with the applicable rules and regulations
of the Internal Revenue Service.
(e) Equity
Awards.
Executive shall be eligible for grants of stock options, restricted stock and
other permissible awards under RxElite, Inc. 2007 Incentive Stock Plan, as
the
Board or Compensation Committee of RxElite shall, in its absolute and sole
discretion, determine, compatible with awards granted or to be granted to the
highest ranking executives in RxElite.
5. Vacation.
Executive shall be entitled to 25 business days paid vacation and 5 paid sick
days (which may be taken as personal days if Executive has not previously taken
said days as sick days), per annum during Executive’s employment under this
Agreement consistent with RxElite’s vacation policy for employees generally,
provided,
however,
that
Executive shall not be permitted to take more than ten consecutive business
days
of vacation at any particular time without the prior approval of RxElite’s
Compensation Committee. RxElite’s Compensation Committee may (but shall not be
obligated to) grant Executive such additional paid sick days, as the
Compensation Committee may decide on a case by case basis.
6. Termination.
Executive’s employment by RxElite shall terminate under the following
circumstances:
(a) Death.
If
Executive dies, Executive’s employment shall be terminated effective as of the
end of the calendar month during which Executive died.
(b) Disability.
In the
event Executive, by reason of physical or mental incapacity, shall be
substantially unable to perform his duties hereunder for a period of three
(3)
consecutive months, or for a cumulative period of six (6) months within any
twelve (12) month period (such incapacity deemed to be “Disability”),
RxElite shall have an option, at any time thereafter, to terminate Executive’s
employment hereunder as a result of such Disability. Such termination will
be
effective ten (10) days after the Board gives written notice of such termination
to Executive, unless Executive shall have returned to the full performance
of
his duties prior to the effective date of the notice. Upon such termination,
Executive shall be entitled to any benefits as to which he and his dependents
are entitled by law, and except as otherwise expressly provided herein, all
obligations of RxElite hereunder shall cease upon the effectiveness of such
termination other than payment of salary earned through the date of Disability,
provided that such termination shall not affect or impair any rights Executive
may have under any policy of long term disability insurance or benefits then
maintained on his behalf by RxElite. Executive’s Base Salary shall continue to
be paid during any period of incapacity prior to and including the date on
which
Executive’s employment is terminated for Disability.
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(c) Cause.
RxElite
shall have the right to terminate Executive's employment for “Cause” 30 days
after RxElite notifies the Executive of the Cause and if such Cause has not
been
remedied by the Executive during such 30 days period. For purposes of this
Agreement, “Cause”
shall
mean:
(i) the
willful or continued failure by Executive to substantially perform his duties,
including, but not limited to, acts of fraud, willful misconduct, gross
negligence or other act of dishonesty;
(ii) a
material violation or material breach of this Agreement which is not cured
within 30 days written notice to Executive;
(iii) misappropriation
of funds, properties or assets of RxElite or the Company by Executive or any
action which has a materially adverse effect on RxElite or the Company or their
business;
(iv) the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or dishonesty; or
(v) abuse
of
drugs or alcohol that impairs Executive’s ability to perform his duties as
described in Section 1 above.
(d) Without
Cause.
RxElite
shall have the right to terminate Executive’s employment hereunder without cause
at any time by providing Executive with written notice of such termination,
which termination shall take effect 30 days after the date such notice is
provided and subject to the payment as set out in Section 7 below.
(e) Voluntary
Resignation.
Executive shall have the right to terminate his employment hereunder by
providing RxElite with a written notice of resignation. Such notice must be
provided 270 days prior to the date upon which Executive wishes such resignation
to be effective - if the effective date is within the first three years, or
60
days if the effective date of resignation is thereafter. Upon receipt of such
resignation, RxElite shall have the option to accelerate the resignation to
a
date prior to the expiration of the 270 (or 60, as applicable) day period.
7. Payments
Due Upon Termination.
In the
event Executive’s employment is terminated pursuant to Section 6(d) above, then
(i) any unvested stock options held by Executive shall immediately vest, (ii)
RxElite shall continue to pay to Executive his base salary as in effect on
the
date of termination for a period of twelve (12) months and (iii) RxElite
shall reimburse Executive for the costs of obtaining comparable benefits for
twelve (12) months, unless Executive obtains other employment that provides
for
comparable benefits as Executive received while employed by RxElite. In the
event Executive’s employment is terminated for any other reason, then Executive
shall be entitled to receive his Base Salary though the effective date of
termination and RxElite shall reimburse Executive for any reasonable expenses
previously incurred for which Executive had not been reimbursed prior to the
termination of employment.
8. Vesting
of Options upon Change of Control.
Upon
the occurrence of a Change of Control, unless otherwise specifically prohibited
under the applicable laws, or the rules and regulations of any governing
governmental agency or national securities exchange, any and all stock options
granted by RxElite to Executive shall become immediately exercisable, and shall
remain exercisable throughout their entire term. “Change of Control” of RxElite
shall mean:
(a) Acquisition
of Shares.
The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (a) the outstanding
shares of common stock of RxElite (the “Outstanding RxElite Common Stock”) or
(b) the combined voting power of the then outstanding voting securities of
RxElite entitled to vote generally in the election of directors (the
“Outstanding RxElite Voting Securities”); provided, however, that for purposes
of this subsection (a), the following acquisitions shall not constitute a Change
of Control: (i) any acquisition by RxElite, (ii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by RxElite or any
corporation controlled by RxElite or (iii) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) below; or
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(b) Change
in Board.
Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by RxElite’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individuals were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or
consents by or on behalf of a Person other than the Board; or
(c) Business
Combination.
Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of RxElite (a “Business
Combination”), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding RxElite Common Stock and Outstanding
RxElite Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result
of
such transaction owns RxElite or all or substantially all of RxElite’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding RxElite Common Stock and Outstanding RxElite Voting
Securities, as the case may be, (ii) no Person (excluding any employee benefit
plan (or related trust) of RxElite or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more
of,
respectively, the then Outstanding RxElite Common Stock or the combined voting
power of the then Outstanding Voting Securities of such corporation except
to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the
action of the Board, providing for such Business Combination; or
(d) Approval
by the shareholders of RxElite of a complete liquidation or dissolution of
RxElite.
9. Surrender
of Books and Papers.
Upon
termination of this Agreement (irrespective of the time, manner, or cause of
termination, be it for cause or otherwise), Executive shall immediately
surrender to RxElite all books, records, or other written papers or documents
entrusted to him or which he has otherwise acquired pertaining to RxElite and
all other RxElite property in Executive’s possession, custody or control that
are not generally available in the public domain.
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10. Inventions
and Patents.
Executive agrees that Executive will promptly from time-to-time fully inform
and
disclose to RxElite any and all ideas, concepts, copyrights, copyrightable
material, developments, inventions, designs, improvements and discoveries of
whatever nature that Executive may have or produce during the term of
Executive’s employment under this Agreement that pertain or relate to the then
current business of RxElite or the Company (the “Creations”),
whether conceived by Executive alone or with others and whether or not conceived
during regular working hours. All Creations shall be the exclusive property
of
RxElite and shall be “works made for hire” as defined in 17 U.S.C. §101, and
RxElite shall own all rights in and to the Creations throughout the world,
without payment of royalty or other consideration to Executive or anyone
claiming through Executive. Executive hereby transfers and assigns to RxElite
(or its designee) all right, title and interest in and to every Creation.
Executive shall assist RxElite in obtaining patents or copyrights on all such
inventions, designs, improvements and discoveries being patentable or
copyrightable by Executive or RxElite or the Company and shall execute all
documents and do all things necessary to obtain letters of patent or copyright,
vest RxElite with full and exclusive title thereto, and protect the same against
infringement by others, and such assistance shall be given by Executive, if
needed, after termination of this Agreement for whatever cause or reason.
RxElite will bear all costs and expenses related to or arising from the
aforesaid activities. Executive hereby represents and warrants that Executive
has no current or future obligation with respect to the assignment or disclosure
of any or all developments, inventions, designs, improvements and discoveries
of
whatever nature to any previous employer, entity or other person and that
Executive does not claim any rights or interest in or to any previous unpatented
or uncopyrighted developments, inventions, designs, improvements or discoveries.
11. Trade
Secrets, Non-Competition and Non-Solicitation.
(a) Trade
Secrets.
Contemporaneous with the execution of this Agreement and during the term of
employment under this Agreement, RxElite shall deliver to Executive or permit
Executive to have access to and become familiar with various confidential
information and trade secrets of RxElite and the Company, including, without
limitation, data, production methods, customer lists, product format or
developments, other information concerning the business of RxElite and the
Company and other unique processes, procedures, services and products of RxElite
and the Company, which are regularly used in the operation of the business
of
RxElite and the Company (the “Confidential
Information”).
Executive shall not disclose any of the Confidential Information that he
receives from RxElite and the Company, or their clients and customers in the
course of his employment with RxElite, directly or indirectly, nor use it in
any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of employment with RxElite. Executive further
acknowledges and agrees that Executive owes RxElite a fiduciary duty to preserve
and protect all Confidential Information from unauthorized disclosure or
unauthorized use. All files, records, documents, drawings, graphics, processes,
specifications, equipment and similar items relating to the business of RxElite
and the Company, whether prepared by Executive or otherwise coming into
Executive’s possession in the course of his employment with RxElite, shall
remain the exclusive property of RxElite and the Company and shall not be
removed from the premises of RxElite or the Company without the prior written
consent of RxElite unless removed in relation to the performance of Executive’s
duties under this Agreement. Any such files, records, documents, drawings,
graphics, specifications, equipment and similar items, and any and all copies
of
such materials that have been removed from the premises of RxElite, shall be
returned by Executive to RxElite. Executive further acknowledges that the
covenants of Executive herein are intended to include the protection of the
confidential information of each of RxElite’s customers and clients, that come
into the possession of Executive as a result of his employment with RxElite,
and
that such customers and clients of RxElite shall be entitled to rely on and
enforce these covenants against Executive for their own benefit.
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(b) Non-Competition.
Executive acknowledges that (i) he will be provided with and have access to
the
Confidential Information, the unauthorized use or disclosure of which would
cause irreparable injury to RxElite, (ii) RxElite’s willingness to enter into
this Agreement is based in material part on Executive’s agreement to the
provisions of this Section
11(b)
and
(iii) Executive’s breach of the provisions of this Section would materially and
irreparably damage RxElite. In consideration for RxElite’s disclosure of
Confidential Information to Executive, Executive’s access to the Confidential
Information, and the salary paid to Executive by RxElite hereunder, Executive
agrees that during the Term and for one (1) year thereafter, regardless of
whether such termination is with or without Cause, Executive shall not, directly
or indirectly, either as an executive, employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, advisor or in
any
other individual or representative capacity, engage or participate in any
business that is in competition in any manner whatsoever with any business
conducted by RxElite and the Company at any time prior to, or during,
Executive’s employment hereunder.
(c) Reasonableness
of Restrictions.
Executive acknowledges that the restrictions set forth in Section
11(b)
of this
Agreement are reasonable in scope and necessary for the protection of the
business and goodwill of RxElite. Executive agrees that should any portion
of
the covenants in Section
11
be
unenforceable because of the scope thereof or the period covered thereby or
otherwise, the covenant shall be deemed to be reduced and limited to enable
it
to be enforced to the maximum extent permissible under the laws and public
policies applied in the jurisdiction in which enforcement is
sought.
(d) Soliciting
Employees.
Executive shall not during the Term or for a period of one (1) year thereafter
for any reason, whether by resignation, discharge or otherwise, either directly
or indirectly, employ, enter into agreement with, or solicit the employment
of,
any employee of RxElite or the Company for the purpose of causing them to leave
the employment of RxElite or the Company or take employment with any business
that is in competition in any manner whatsoever with the business of RxElite
or
the Company.
(e) Injunctive
Relief; Extension of Restrictive Period.
In the
event of a breach of any of the covenants by Executive or RxElite contained
in
this Agreement, it is understood that damages will be difficult to ascertain,
and either party may petition a court of law or equity for injunctive relief
in
addition to any other relief which Executive or RxElite may have under the
law,
including, but not limited to, reasonable attorneys’ fees.
12. Miscellaneous.
(a) Assignment.
This
Agreement shall be binding upon the parties and their respective heirs,
executors, administrators, successors and assigns. Executive shall not assign
any part of his rights under this Agreement without the prior written consent
of
RxElite.
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(b) Entire
Agreement.
This
Agreement contains the entire agreement and understanding between the parties
and supersedes any and all prior understandings and agreements between the
parties regarding Executive’s employment.
(c) Modification;
Waiver.
No
modification hereof shall be binding unless made in writing and signed by the
party against whom enforcement is sought. No waiver of any provisions of this
Agreement shall be valid unless the same is in writing and signed by the party
against whom it is sought to be enforced, unless it can be shown through custom,
usage or course of action.
(d) Governing
Law.
This
Agreement is executed in, and it is the intention of the parties hereto that
it
shall be governed by, the laws of the State of Delaware without giving effect
to
applicable conflict of laws provisions.
(e) Severability.
The
provisions of this Agreement shall be deemed to be severable, and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(f) Notices.
Any
notice or communication permitted or required by this Agreement shall be in
writing and shall become effective upon personal service, or service by wire
transmission, which has been acknowledged by the other party as being received,
or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows:
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(i)
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If
to RxElite:
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RxElite
Holdings Inc.
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0000
X. Xxxx Xxxxxx,
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Xxxxx
000
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Xxxxxxxx,
XX 00000
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Attn:
Chief Operating Officer
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(ii)
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If
to Executive, to:
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Xx.
Xxxx Xxxxxx
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00
Xxxxxxxxx Xxxxxx
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Xxxxxx
00000, Xxxxxx
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Telecopier:
x000-0-0000000
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Telephone:
x000-00-0000000
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(g) Non-Disparagement.
Both
parties acknowledge and agree not to defame or publicly criticize the services,
business, integrity, veracity or personal or professional reputation of the
other, in either a professional or personal manner, at any time during or
following the employment period. With respect to RxElite, this shall include
any
officers, directors, partners, executives, employees, representatives or agents
of RxElite.
(h) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed as original but all of which together shall constitute one and the same
instrument.
[Remainder
of Page Left Intentionally Blank]
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IN
WITNESS WHEREOF,
RxElite
and Executive have executed this Agreement as of the Effective
Date.
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EXECUTIVE
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By:
Xxxxxxxx Xxxxxxxx and Xxxx Xxxxxxxx
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Xx.
Xxxx Xxxxxx
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Its
Authorized Officers
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