Exhibit 10.5
Employment Contract Between American Bio Medica Corporation
and Xxxxxxx Xxxxxxxxx
EMPLOYMENT AGREEMENT
This agreement (the "Agreement") made and entered into this 17th day of
April, 1997 by and between American Bio Medica, a New York Corporation with its
office located at 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Employer") and
Xxxxxxx Xxxxxxxxx individual residing at 00 Xxxxxxx Xxxx, Xxxxx, XX 00000
("Employee") (Employer and Employee are sometimes collectively referred to as
the "Parties")
WHEREAS, Employer is engaged in the business of research and development,
design, manufacture and marketing of drug testing kits and other biomedical
products; and
WHEREAS, Employee is experienced in production and operations of biomedical
products including drug testing kits.
WHEREAS, both Employer and Employee are desirous of entering into an
employment agreement whereby Employee would devote his time and Employer would
compensate him as an employee.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Parties agree as follows:
1. Employment and Duties: Employer hereby employs Employee as Vice President
and General Manager.
2. Performance: Employee will devote substantially his full working time and
efforts as an employee of Employer. "Full working time," in this context,
shall mean at least an average of 40 hours per week.
3. Term: The Employment Term shall commence on May 26, 1977 and, unless
extended by mutual agreement of the parties hereto, or sooner terminated or
canceled pursuant to Section 14 hereof, shall terminate and expire on May
25, 2000.
4. Compensation: Employee shall be paid a base annual salary of $84,000 per
annum. Employer may from time to time enter into supplemental agreements or
memoranda in writing with Employee for the award and payment to him of
additional compensation or bonuses upon such terms and conditions as
Employer shall deem to be in its business interest. In addition, effective
with the date of this contract:
Employee shall be paid, on a quarterly basis, a bonus equal to 1% net
sales after gross revenues of $1,000,000 per fiscal year.
Employee shall receive 150,000 options at $3.00 per share vesting
immediately.
No bonuses will be earned subsequent to the Employee's election to
terminate the Agreement or Employer's discharge of Employee for cause.
In the event of Termination due to death of Employee or inability due
to illness of Employee to render services under the Agreement to
Employer, no bonuses shall be paid; but shares shall vest pursuant to
the formula set forth in this section.
In the event that American Bio Medica Corporation is merged or
acquired by another company, all unvested shares and/or options become
immediately vested.
If the employee is terminated without cause, all unvested shares
and/or options become immediately vested and the balance of annual
salary due for the term of the contract is paid as severance.
5. Employee Benefits: Employee shall be entitled to be covered by any employee
health insurance policy, dental plan, pension plan, stock option or similar
plans or other employee benefit(s) offered generally to management
employees of Employer. Employee shall not be obligated to contribute any
money to be covered under said plain except in the event the Company enacts
a contributory pension plan for other employees. Employee shall be entitled
to three weeks paid vacation at times to be mutually agreed upon between
Employer and Employee.
6. Expenses: In addition to the compensation provided Employee under the
Agreement, Employer shall reimburse Employee for any and all authorized
expenses which he shall incur directly relating to his functions as an
employee. Reimbursable expenses shall include, but are not limited to,
travel (except to and from the office) and entertainment and purchase of
supplies. Reimbursement of expenses shall not be deemed as compensation to
Employee.
7. Recommendations for Operations: Employee shall provide Employer all
information regarding Employer's business of which Employee has knowledge.
Employee shall make all suggestions and recommendations that will be of
mutual benefit to Employer and Employee.
8. Confidentiality: Employee recognizes that Employer has and will have
information relating to inventions, equipment and machinery, products,
prices, apparatus, costs, discounts, future plans, business affairs,
process information, trade secrets, technical information, customer lists,
product design, copyrights, patents and other vital information
)collectively, the "Information") which are valuable, special and unique
assets of Employer. Employee agrees that Employee will not at any time or
in any manner, either directly of indirectly, divulge, disclose, or
communicate any
Information to any third party without the prior written consent of
Employer. Employee will protect the Information and treat it as strictly
confidential. A violation of Employee of this paragraph shall be a material
violation of the Agreement and will justify immediate Termination and legal
and/or equitable relief.
9. Unauthorized Disclosure of Information: If it appears that employee has
disclosed (or has threatened to disclose) Information in violation of the
Agreement, Employer shall be entitled to an injunction to restrain Employee
from disclosing, in whole or in part, such Information, or from providing
any services to any party to whom such Information has been disclosed or
may be disclosed. Employer shall not be prohibited by this provision from
pursuing other remedies, including a claim for losses and damages.
10. Confidentiality After Termination of Employment: The confidentiality
provisions of the Agreement shall remain in full force and effect for a two
year period after Termination. During such two year period, neither Party
shall make or permit the making of any public announcement or public
statement of any kind that Employee was formerly employed by or connected
with Employer except as may be required by the Securities Act of 1933, the
Securities Exchange Act of 1934 or any relevant state securities laws.
11. Development of New Products/Technologies: All products or technologies
developed during the term of the Agreement shall become the property of
Employer. Employee shall transfer to Employer all ideas, prototypes,
drawings, descriptions, patents, copyrights, trademarks or other
intellectual property to Employer. Employer has the right to accept or
reject any such assets; in the event of rejection, all ownership rights
will revert to Employee.
12. Non-Compete: Recognizing that the various items of Information are special
and unique assets of the company. Employee covenants that for a period of
two years following voluntary Termination, Employee may not directly or
indirectly engage in a business competitive with Employer in any of the
eastern seaboard States in which the Employer is presently producing or
distributing its products and also in eastern seaboard States in which
Employee knows or has reason to believe Employer intends to extend its
production or distribution activities. Employee will not be compensated by
the Company during this period. Employee may not, directly or indirectly,
contact, (including, but not limited to employees of Employer), solicit,
hire, sell to, purchase from, obtain financing from or recommend the
contacting, selling to, purchasing from or financing from any person,
institution, entity or company with which Employer has dealt during the one
year period preceding the date of the Agreement. The term "directly or
indirectly engaging in any competitive business" includes, but is not
limited to, (I) engaging in a business as owner, partner, or agent, (II)
becoming an employee of any third party engaged in such business, (III)
becoming interested directly or indirectly in any such business, or (IV)
soliciting any customer of Employer for the benefit or a third party
engaged in such business.
13. Employee's Inability to Contract for Employer: Employee shall not have the
right to make any contracts or commitments for or on behalf of Employer out
of the area of normal business operations without first obtaining the
express written consent of board of directors of Employer or a relevant
committee of the board of directors for the specific contract or commitment
or class of contract or commitment.
14. Termination: The Agreement shall terminate upon the happening of any of the
following events:
(a) Death of Employee;
(b) Discontinuance of the business of Employer for a period of sixty (60)
days;
(c) Resignation of Employee;
(d) Unwillingness or inability caused by illness or otherwise to fulfill
the duties and obligations of his employment for a continuous period
of 60 days or an aggregate of 90 days in any yearly period;
(e) Reasonable cause, including but not limited to, the breach of
agreement, covenant, representation or warranty of Employee set forth
herein, or gross misconduct which brings him or Employer into
disrepute or is detrimental to Employers business.
(f) Intention and notice to terminate pursuant to paragraph 3.
15. Assignment: The rights and obligations of the Employer under this agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Employer.
16. Severability: If any term of the Agreement shall, to any extent, be
determined through arbitration or by court of competent jurisdiction to be
invalid or unenforceable, the remainder of the Agreement shall not be
effected thereby and each other term of the Agreement shall be valid and
enforceable to the fullest extent permitted by law.
17. Arbitration: Any controversy arising from or related to the Agreement shall
be determined by arbitration in New York City in accordance with the rules
of the America Arbitration Association any such determination or award may
be enforced by any court having jurisdiction thereof.
18. Complete Agreement: The Agreement constitutes the entire agreement between
the Parties regarding the subject matter herein and supersedes any other
previous and/or collateral agreements or resolutions of the board of
directors pertaining thereto. Agreement may not be modified or amended
other than by a written instrument duly executed by or on behalf of the
parties hereto.
20. Governing Law: The Agreement shall be interpreted and construed under the
internal laws of the State of New York. 21. Indemnification: The personal
liability of the directors and officers of the Corporation is eliminated to
the fullest extent permitted by the provisions of paragraph (b) of Section
402 of the Business Corporation Law, as the same may be amended and
supplemented. Section 402(b) of the Business Corporation Law of New York is
printed in full in the Company's Form 10-SB-2-A on file with the Securities
and Exchange Commission in Item 5, pages 23 through 28.
IN WITNESS WHEREOF, the Parties have executed the Agreement as of the date
first written above.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
its President
/s/Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
