1
EXHIBIT 10.20
EMPLOYMENT AGREEMENT WITH
XXXXXX X. XXXXX, XX.
AGREEMENT, dated as of August 10, 1998, between Veridien Corporation, a
Delaware corporation, (the "Company"), and Xxxxxx X. Xxxxx, Xx., (the
"Employee").
WITNESSETH:
WHEREAS, the Company desires to offer the Employee employment upon the
terms and conditions set forth herein and the Employee desires to accept such
employment; and
WHEREAS, the Company is, or will be, engaged in the business of
manufacture and distribution of disinfectants and sterilants, infection control
and distribution of certain nutrients, throughout the United States; and
WHEREAS, Employee is a Certified Public Accountant who has experience
as the Chief Financial Officer and Director of corporations; and
WHEREAS, Company and Employee are desirous of entering into a contract
for the services of Employee in the capacities of Chief Operating Officer, and
that in such capacity Employee is enabled and will be enabled to perform such
duties as may be designated by and subject to the supervision of the Company's
Board of Directors and Chief Executive Officer, and shall serve in such
additional capacities appropriate to his responsibilities and skills as shall be
designated by the Company, through action of its Board of Directors.
NOW THEREFORE in consideration of the mutual benefits to be derived
from this Agreement, the Company and the Employee hereby agree as follows:
1. Term of Employment: Office and Duties
(a) During the Period of Employment (as hereafter defined), the Company
shall employ the Employee as a senior executive of the Company with the title of
Chief Operating Officer, and Director, if so elected, with the responsibilities
prescribed for such offices in the Bylaws of the Company, such responsibilities
to be carried out in accordance with policies and objectives established by the
Board of Directors.
(b) During the Period of Employment, the Employee shall devote
substantially all or this time to the business and affairs of the Company and
its subsidiaries, except for vacations of three (3) weeks per year, illness or
incapacity. The Employee shall not be entitled to receive additional
compensation for serving as a Director of the Company, if so elected.
2. Term: Period of Employment
Subject to extension or termination as hereinafter provided, the period
of employment hereunder shall be from the date hereof through December 31, 2001
(the "Period of Employment"), provided that the Period of Employment shall be
automatically renewed for successive two (2) year periods unless written notice
to the contrary is given by either party to the
2
Page 2 of 7
other party not less than six (6) months prior to the expiration of the initial
period in the Period of Employment and each successive two (2) year period in
the Period of Employment.
3. Compensation and Benefits
(a) Base Salary. The Company shall pay the Employee a fixed salary
("Base Salary") at a rate of One Hundred Thirty Thousand Dollars ($130,000) per
year. Initially, Employee will draw salary at the rate of $90,000 per year, with
the balance of $40,000 per year accruing as payable to employee until such time
as the Company achieves breakeven status or additional funding is received by
Company. Any arrearage shall be paid at the time additional funding is received.
The Board of Directors will periodically review, at least annually, the
Employee's Base Salary with a view to increasing it further if, in the sole
judgment of the Board of Directors, the earnings of the Company or the services
or the Employee merit such an increase. Annual increases in Base Salary, once
granted, shall not be subject to revocation and shall become a part of the Base
Salary. Base Salary will be payable in accordance with the customary payroll
practices of the Company, but in no event less frequently than monthly.
(b) Profitability Bonus. The Company shall pay the Employee a bonus if,
in the sole judgment of the Board of Directors, the earnings of the Company or
the services of the Employee merit such bonus.
(c) Fringe Benefits: Options.
(i) During the Period of Employment, Employee shall be entitled
to participate in fringe benefit, deferred compensation and stock
option plans or programs of the Company, if any, to the extent that
his position, tenure, salary, age, health and other qualifications
make him eligible to participate, subject to the rules and regulations
applicable thereto. Such additional benefits shall include, but not be
limited to, paid sick leave and individual health insurance, all in
accordance with the policies of the Company. Except as specifically
set forth herein, the terms of, and participation by Employee in, any
deferred compensation plan or program shall be determined by the
Company's Board of Directors in its sole discretion. The number of
option shares granted under this agreement will be adjusted
proportionally in the vent of any stock split or reverse split which
might occur after the date of this agreement and prior to the exercise
of the options.
(ii) Concurrently with the execution of this agreement, the
Company shall deliver to Employee an option to purchase one-hundred
fifty thousand (150,000) shares of the Company's common stock @ $0.10
per share, (the current bid price). All options shall have a term of
five years.
(iii) Additional options shall have a term of not less than five
(5) years, shall not terminate earlier for any reason other than the
Employee's termination pursuant to Section 7(a) and shall vest and
become exercisable with respect to a number of shares of Common Stock
equal to: (i) one-hundred thousand (100,000) shares of the Company's
common stock @ $0.20 per share upon continued employment to December
31, 1998; (ii) two hundred fifty thousand (250,000) shares of the
Company's common stock @ $0.20 per share upon continued employment to
December 31, 1999, one-twelfth of which are vested each calendar month
during 1999; and (iii) up to four hundred thousand (400,000) shares of
the Company's common stock @ $0.20 per share upon achievement by the
3
Page 3 of 7
Company of certain definable events such as identification and
completion of acquisitions, mergers and other events as may be agreed
upon by the Company and Employee. Concurrent with the signing of this
agreement, the Company shall issue to Employee, for having acquired a
contract fill manufacturer to occupy the Company's facility and
provide services to the Company, options to purchase an additional one
hundred thousand (100,000) shares of common stock @ $0.10 per share,
(current price).
(d) Perquisites. During the Period of Employment, the Company will
reimburse the Employee for continuing education expenses as shall be suitable to
the character of the Employee's position with the Company and adequate for the
performance of his duties hereunder, including maintenance of Certified Public
Accounting Certificate.
4. Business Expenses
The Company shall pay or reimburse the Employee for all reasonable
travel or other expenses incurred by the Employee in connection with the
performance of his duties under this Agreement in accordance with such
procedures as the Company may from time to time establish for senior officers
and as required to preserve any deductions for Federal income taxation purposes
to which the Company may be entitled.
5. Disability
The Company shall provide for the Employee a disability insurance
policy issued by an insurer as provided to other senior executives. In the event
of the Employee's disability, the Employee shall continue to be covered by all
of the Company's life, medical, health and dental plans, at the Company's
expense, as provided by the professional employer organization utilized by the
Company.
6. Death
The Company shall provide the Employee with a life insurance policy
issued by an insurer acceptable to the Employee. In the event of the Employee's
death, the Employee's family, if so elected by employee, shall continue to be
covered by all of the Company's life, medical, health and dental plans, at the
Company's expense for six months, as provided by the professional employer
organization utilized by the Company.
7. Termination of Employment
Notwithstanding any other provision of this Agreement, the Period of
Employment may be terminated:
(a) By the Company for "just cause" by written notice to Employee
affective upon receipt. For purposes of this agreement, the term "just cause"
shall mean any of the following: (i) Employee's repeated willful misconduct or
gross negligence, (ii) Employee's repeated conscious disregard of his
obligations hereunder or of any other written duties reasonably assigned to him
by the Board of Directors, (iii) The Employee's repeated conscious violation of
any provision of the Company's by-laws or of its other stated policies,
standards, or regulations,
4
Page 4 of 7
(iv) the Employee's commission any act involving fraud or moral turpitude, or
(v) a determination that the Employee has demonstrated a dependence on any
addictive substance, including alcohol, controlled substances, narcotics or
barbiturates. Except for any accrued salary, benefits, or stock options, vested
and unpaid as of the date of any such termination, the Company shall be under no
further obligation to Employee.
(b) By the Company, other than for just cause, in its sole and absolute
discretion, provided that in such event the Company shall, as liquidated damages
or severance pay, or both, pay to the Employee in equal monthly instalments,
beginning the month following the month in which the employee is terminated, an
amount equal to four months aggregate Full Base Salary that would have been
payable during the next four month period.
(c) By the Employee, (i) if the Company's Board of Directors fails to
elect or reelect the Employee to, or removes the Employee from, the office of
Chief Operating Officer, provided that in such event the Company shall, as
liquidated damages or severance pay, or both, pay to the Employee in equal
monthly installments beginning the month following the month in which the
employee is terminated, an amount equal to four months aggregate Full Base
Salary that would have been payable during the next four months.
(d) By the Employee, before the expiration of the agreement term, by
giving the Company 60 days written notice of his intention to terminate such
employment. In event of such termination, the Employee shall be entitled to
receive any salary, benefits, and stock options accrued or vested and unpaid as
of the date of any such termination and any benefits to which the Employee may
be entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company.
8. Non-Competition
During the Period of Employment and any period during which the
Employee is receiving any payments pursuant to this Agreement, and for a period
of two years thereafter, the Employee shall not anywhere in the United States
and Canada (recognizing that Company and its subsidiaries have operations
throughout the United States and Canada), directly or indirectly engage in
activities or solicit any business in the surface disinfectant business, or such
other business carried out by the Company, which are or may reasonably be
expected to become competitive with the business of the Company (unless the
Board of Directors of the Company shall have authorized such activity and the
Company shall have consented thereto in writing), either as an individual on his
own account, as an investor (except for investments of less than 5% of the
securities of a corporation subject to the reporting requirements of Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended), or as a
partner or joint venturer, or as a consultant, employee, agent or salesman for
any other person, or as an officer or director of a corporation or otherwise.
9. Inventions and Confidential Information
The parties hereto recognize that a major need of the Company is to
preserve its specialized knowledge, trade secrets, and confidential information
concerning the disinfectant business, and other business conducted by the
Company. The strength and good will of the Company is derived from the
specialized knowledge, trade secrets, and confidential information generated
from experience with the activities undertaken by the Company and its
subsidiaries.
5
Page 5 of 7
The disclosure of this information and knowledge to competitors would be
beneficial to them and detrimental to the Company, as would the disclosure of
information about the marketing practices, pricing practices, costs, profit
margins, design specifications, analytical techniques, and similar items of the
Company and its subsidiaries. By reason of his being a senior executive of the
Company, Employee has or will have access to, and has obtained or will obtain,
specialized knowledge, trade secrets and confidential information about the
Company's operations and the operations of its subsidiaries, which operations
extend through the United States and Canada. Therefore, Employee hereby agrees
as follows, recognizing that the Company is relying on these agreements in
entering into this Agreement:
(i) During and after the term of this Agreement, Employee will not use,
disclose to others, or publish any inventions or any confidential
business information about the affairs of the Company, including but
not limited to confidential information concerning the Company's
products, methods, engineering, designs and standards, analytical
techniques, technical information, customer information, employee
information, and other confidential information acquired by him in the
course of this past or future services for the Company. Employee
agrees to hold as the Company's property all memoranda, books, papers,
letters, formulas and other data, and all copies thereof and
therefrom, in any way relating to the Company's business and affairs,
whether made by him or otherwise coming into his possession, and on
termination of his employment, or on demand of the Company, at any
time, to deliver the same to the Company within twenty four hours of
such termination or demand.
(ii) During the term of this Agreement and for one year thereafter,
Employee will not induce any employee of the Company to leave the
Company's employ or hire any such employee (unless the Board of
Directors of the Company shall have authorized such employment and the
Company shall have consented thereto in writing).
10. Indemnification
The Company will indemnify the Employee (and his legal representatives
or other successors) to the fullest extent permitted by the laws of the States
of Florida, as in effect at the time of the subject act or omission, or on the
effective date of this Agreement, whichever affords or afforded greater
protection to the Employee, and the Employee shall be entitled to the protection
of any insurance policies the Company may elect to maintain generally for the
benefit of its directors and officers, against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representative in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of this being
or having been a director or officer of the Company or any of its subsidiaries.
11. Litigation Expenses
In the event of any litigation or other proceeding between the Company
and the Employee with respect to the subject matter of this Agreement and the
enforcement of the rights hereunder, the Company shall reimburse the Employee
for all of his reasonable costs and expenses relating to such litigation or
other proceeding, including, without limitation, his reasonable attorney's fees
and expenses, provided that such litigation or proceeding results in any
(a) settlement requiring the Company to make a payment to the
Employee, or
6
Page 6 of 7
(b) final judgment or order in favor of the Employee.
In the event the Employer is victorious, Employee shall be required to reimburse
the Company for any of the costs and expenses relating to such litigation or
other proceeding.
12. Consolidation; Merger; Sale of Assets; Change of Control
(a) Nothing in this Agreement shall preclude the Company from
consolidating all of its assets to, or entering into a partnership or joint
venture with, another corporation or other entity, provided the corporation
resulting from or surviving such consolidation or merger, or to which such
assets are transferred, or such partnership or joint venture assumes this
Agreement and all obligations and undertakings of the Company hereunder. Upon
such a consolidation, merger, transfer of assets or entry into partnership or
joint venture, this Agreement shall inure to the benefit of, be assured by, and
be binding upon such resulting or surviving transferee corporation or such
partnership or joint venture, and the term, "Company", as used in this
Agreement, shall mean such corporation, partnership or joint venture, and this
Agreement shall continue in full force and effect and shall entitle the Employee
and his heirs, beneficiaries and representatives to exactly the same
compensation, benefits, perquisites, payments and other rights as would have
been their entitlement had such consolidation, merger, transfer of assets or
entry into partnership or joint venture not occurred.
(b) Notwithstanding any other provision of this Agreement, if the
Employee elects to terminate his employment within four months as a result of a
change in ownership or effective control of the Company as defined in Section
280G of the Internal Revenue Code and the regulations thereunder ("Change in
Control"), the Company shall pay to the Employee, within 120 days of the date
that the Company is notified by the Employee that such employment is being
terminated for such reason, an amount equal to the Employee's four months of
annual total compensation, including Base Salary and all benefits, perquisites,
incentives and bonuses. The Employee shall continue to be covered by all of the
Company's life, medical, health and dental plans, at the Company's expense as
provided by the professional employer organization utilized by the Company
during four month period following termination.
13. Survival of Obligations
The obligations of the Company under Section 10 and 11 shall survive
the termination for any reason of this Agreement (whether such termination is by
the Company, by the Employee, upon the expiration of this Agreement or
otherwise).
14. Severability
In any case any one or more of the provisions or part of the provision
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect in any jurisdiction, such invalidity, illegality
or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, but this Agreement
shall be reformed and construed in such jurisdiction as if such provision or
part of a provision held to be invalid or illegal or unenforceable had never
been contained herein and such provision or part reformed so that it would be
valid, legal and enforceable in such jurisdiction to
7
Page 7 of 7
the maximum extent possible. In furtherance and not in limitation of the
foregoing, the Company and Employee each intend that the covenants contained in
Sections 8 and 9 shall be deemed to be a series of separate covenants, one for
each county of the State of Florida and one for each every other state,
territory or jurisdiction of the United States and any foreign country set forth
therein. If, in any judicial proceeding, a court shall refuse to enforce any of
such separate covenants, then such unenforceable covenants shall be deemed
eliminated from the provisions hereof for the purpose of such proceedings to the
extent necessary to permit the remaining separate covenants to be enforced in
such proceedings. If, in any judicial proceeding, a court shall refuse to
enforce any one or more of such separate covenants because the total time
thereof is deemed to be excessive or unreasonable, then it is the intent of the
parties hereto that such covenants, which would otherwise be unenforceable due
to such excessive or unreasonable period of time, be enforced for such lesser
period of time as shall be deemed reasonable and not excessive by such court.
15. Entire Agreement: Amendment
This Agreement contains the entire agreement between the Company and
the Employee with respect to the subject matter thereof. This Agreement may not
be amended, waived, changed, modified or discharged except by an instrument in
writing executed by or on behalf of the party against whom any amendment,
waiver, change, modification or discharge is sought. Confidentiality shall
survive contract's end.
16. Notices
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have duly given if delivered or mailed,
postage prepaid, first class as follows:
(a) To the Company: (b) To the Employee:
VERIDIEN CORPORATION XXXXXX X. XXXXX, XX.
00000 00XX XXXXXX XXXXX 000 XXXXX XXXXXXX XXXXXX
XX. XXXXXXXXXX, XX 00000 XXXXX, XX 00000
By: By:
------------------------- ----------------------------
Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx, Xx.
Witness: Witness:
--------------------- -----------------------
