EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on this 1st day,
February, 2000 by and between CytoGenix, Inc., a Nevada corporation (CYGX) and
Xxxxxxxx Xxxxxxxxxx (EMPLOYEE) 00000 Xxxxxxxxxx, Xxxxxxx, XX 00000.
RECITALS
A. CYGX desires to be assured of the association and services of EMPLOYEE
for CYGX.
B. EMPLOYEE is willing and desires to be employed by CYGX, and CYGX is
willing to employ EMPLOYEE, upon the terms, covenants and conditions hereinafter
set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. CYGX hereby employs EMPLOYEE as Chief Financial Officer, subject
to the supervision and direction of Xxxxxxx X. Xxxxxxxx, and the CYGX Board of
Directors and Chief Executive Officer.
2. Term. The term of this Agreement shall be for a period of five (5) year
commencing on the date hereof, unless terminated earlier pursuant to Section 8
below; provided, however, that EMPLOYEE's obligations in Section 7 below shall
continue in effect after such termination.
3. Compensation; Reimbursement.
3.1 Base Salary. For all services rendered by EMPLOYEE under this
Agreement, CYGX shall pay EMPLOYEE a base salary of Seventy Two
Thousand Dollars ($72,000) per annum, payable monthly in equal
installments (the "Base Salary"). The amount of the Base Salary may
be increased at any time and from time to time by the Board of
Directors of CYGX, and shall be adjusted annually to reflect changes
in the Consumer Price Index for the Houston, Texas base area, All
Consumers and All Items. No such change shall in any way abrogate,
alter, terminate or otherwise effect the other terms of this
Agreement.
3.2 Incentive Bonus. In addition to the Base Salary, EMPLOYEE shall be
eligible for an incentive bonus (INCENTIVE BONUS) each year in an
amount not less than 10% of the Base Salary (the MINIMUM BONUS) nor
more than 100% of the Base Salary earned in the calendar year. The
INCENTIVE BONUS shall be based upon the operating results for that
year of EMPLOYEE's division or subsidiary, as the case may be, and
shall be paid, if earned, within 30 days after such operating
results have been determined by CYGX's accountants. The criteria
upon which the INCENTIVE BONUS is awarded shall be comparable to
those applicable to the other chairmen of CYGX's operating divisions
or subsidiaries.
3.3 Stock Option. Employee may purchase CYGX common stock every quarter
in an amount equal to twenty five percent (25%) of base salary at
par computed at the closing price on each payday in the quarter or
applicable part there of.
3.4 Additional Benefits. In addition to the Base Salary and the
INCENTIVE BONUS, EMPLOYEE shall be entitled to all other benefits of
employment provided to the other officers of CYGX's operating
divisions or subsidiaries.
3.5 Reimbursement. EMPLOYEE shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business
entertainment incurred in connection with the performance of his or
her duties under this Agreement (1) so long as such expenses
constitute business deductions from taxable income for CYGX and are
excludable from taxable income to the EMPLOYEE under the governing
laws and regulations of the Internal Revenue Code (provided,
however, that EMPLOYEE shall be entitled to full reimbursement in
any case where the Internal Revenue Service may, under Section
274(n) of the Internal Revenue Code, disallow to CYGX 20% of meals
and entertainment expenses); and (2) to the extent such expenses do
not exceed the amounts allocable for such expenses in budgets that
are approved from time to time by CYGX. The reimbursement of
EMPLOYEE's business expenses shall be upon monthly presentation to
and approval by CYGX of valid receipts and other appropriate
documentation for such expenses.
4. Scope of Duties.
4.1 Assignment of Duties. EMPLOYEE shall have such duties as may be
assigned to him or her from time to time by CYGX's Chief Executive
Officer or CYGX's Board of Directors commensurate with his
experience and responsibilities in the position for which he is
employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Chief Executive
Officer and the Board of Directors of CYGX.
4.2 General Specification of Duties. EMPLOYEE's duties shall include,
but not be limited to, the duties and performance goals as
enumerated in the Job Description (Appendix A) attached for the
biotechnology division or subsidiary:
The above referenced specifications (Appendix A) are not
intended as a complete itemization of the duties which
EMPLOYEE shall perform and undertake on behalf of CYGX in
satisfaction of his or her employment obligations under this
Agreement.
Intellectual properties resulting from Employees activities
shall become the property of the company according to the
terms of a Commercialization Agreement negotiated as
appropriate.
4.3 EMPLOYEE's Devotion of Time. EMPLOYEE hereby agrees to devote his
full time, abilities and energy to the faithful performance of the
duties assigned to him or her and to the promotion and forwarding of
the business affairs of CYGX, and not to divert any business
opportunities from CYGX to himself or to any other person or
business entity.
4.4 Conflicting Activities.
(1) EMPLOYEE shall not, during the term of this Agreement, be
engaged in any other business activity without the prior consent of
the Board of Directors of CYGX; provided, however, that this
restriction shall not be construed as preventing EMPLOYEE from
investing his personal assets in passive investments in business
entities which are not in competition with CYGX or its affiliates,
or from pursuing business opportunities as permitted by paragraph
4.5(b).
(2) EMPLOYEE hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or
anticipated future business of CYGX, in a manner consistent with the
best interests of CYGX and with his duties under this Agreement.
Should EMPLOYEE discover a business opportunity that does not relate
to the current or anticipated future business of CYGX, he shall
first offer such opportunity to CYGX. Should the Board of Directors
of CYGX not exercise its right to pursue this business opportunity
within a reasonable period of time, not to exceed sixty (60) days,
then EMPLOYEE may develop the business opportunity for himself;
provided, however, that such development may in no way conflict or
interfere with the duties owed by EMPLOYEE to CYGX under this
Agreement. Further, EMPLOYEE may develop such business opportunities
only on his own time, and may not use any service, personnel,
equipment, supplies, facility, or trade secrets of CYGX in their
development. As used herein, the term "business opportunity" shall
not include business opportunities involving investment in publicly
traded stocks, bonds or other securities, or other investments of a
personal nature.
5. Stock of Company. So long as this Agreement is in effect, EMPLOYEE shall be
entitled to purchase stock of CYGX in the same amounts and for the same
consideration, terms and conditions as provided to other chairmen of CYGX's
operating divisions or subsidiaries. The manner of acquisition of stock shall be
structured so as to minimize adverse tax consequences to EMPLOYEE.
7. Confidentiality of Trade Secrets and Other Materials.
7.1 Trade Secrets. Other than in the performance of his or her duties
hereunder, EMPLOYEE agrees not to disclose, either during the term
of his or her employment by CYGX or at any time thereafter, to any
person, firm or corporation any information concerning the business
affairs, the trade secrets or the customer lists or similar
information of CYGX. Any technique, method, process or technology
used by CYGX shall be considered a "trade secret" for the purposes
of this Agreement.
7.2 Ownership of Trade Secrets; Assignment of Rights. EMPLOYEE hereby
agrees that all know-how, documents, reports, plans, proposals,
software, computer programs and videos developed by CYGX, marketing
and sales plans, client lists, client files and materials made by
him or her or by CYGX are the property of CYGX and shall not be used
by him in any way adverse to CYGX's interests. EMPLOYEE shall not
deliver, reproduce or in any way allow such documents or things to
be delivered or used by any third party without specific direction
or consent of the Board of Directors of CYGX. EMPLOYEE hereby
assigns to CYGX any rights which he or she may have in any such
trade secret or proprietary information.
7.3 EMPLOYEE hereby agrees that he/she will not, for a period of two (2)
years following termination from CYGX as defined in Section 8 of
this Agreement, solicit or perform professional services of the
nature and kind of those performed for CYGX under this Agreement for
any client who CYGX had previously or is serving at time of
EMPLOYEE's termination.
7.4 EMPLOYEE further agrees that in addition to compensation for damages
caused by breach of this Agreement, CYGX shall be entitled to
injunctive relief by a court of competent jurisdiction to prevent
irreparable harm and injury to CYGX by said breach or potential
breach.
8. Termination.
8.1 Bases for Termination.
(1) EMPLOYEE's employment hereunder may be terminated at any time by
mutual agreement of the parties.
(2) This Agreement shall automatically terminate on the last day of
the month in which EMPLOYEE dies or becomes permanently
incapacitated. "Permanent incapacity" as used herein shall mean
mental or physical incapacity, or both, reasonably determined by
CYGX's Board of Directors based upon a certification of such
incapacity by, in the discretion of CYGX's Board of Directors,
either EMPLOYEE's regularly attending physician or a duly licensed
physician selected by CYGX's Board of Directors, rendering EMPLOYEE
unable to perform substantially all of his or her duties hereunder
and which appears reasonably certain to continue for at least six
consecutive months without substantial improvement. EMPLOYEE shall
be deemed to have "become permanently incapacitated" on the date
CYGX's Board of Directors has determined that EMPLOYEE is
permanently incapacitated and so notifies EMPLOYEE.
(3) EMPLOYEE's employment may be terminated by CYGX "with cause,"
effective upon delivery of written notice to EMPLOYEE given at any
time (without any necessity for prior notice) if any of the
following shall occur:
(a) any action by EMPLOYEE which would be grounds for
termination any provision currently covering any willful
breach of duty, habitual neglect of duty, and continued
incapacity; (b) any material breach of EMPLOYEE's obligations
in Section 8 above; or (c) any material acts or events which
inhibit EMPLOYEE from fully performing his or her
responsibilities to CYGX in good faith, such as (i) a felony
criminal conviction; (ii) any other criminal conviction
involving EMPLOYEE's lack of honesty or EMPLOYEE's moral
turpitude; (iii) drug or alcohol abuse; or (iv) acts of
dishonesty, gross carelessness or gross misconduct.
(4) EMPLOYEE's employment may be terminated by CYGX "without cause"
(for any reason or no reason at all) at any time by giving EMPLOYEE
60 days prior written notice of termination, which termination shall
be effective on the 60th day following such notice. If EMPLOYEE's
employment under this Agreement is so terminated, CYGX shall (a)
make a lump sum cash payment to EMPLOYEE within 10 days after
termination of an amount equal to (i) EMPLOYEE's Base Salary for the
balance of the year in which termination occurs, (ii) a prorata
portion of the INCENTIVE BONUS, if any, earned for the year in which
termination occurs prorated to the date of termination, plus (iii)
any unreimbursed expenses accruing to the date of termination; and
(b) make a lump sum cash payment equal to EMPLOYEE's annual Base
Salary, as increased pursuant to Section 3.1, on each anniversary
date of this Agreement for the balance of the term specified in
Section 2. For purposes of this provision, EMPLOYEE's annual Base
Salary and the remaining portion of the term of the Agreement shall
be calculated as of the termination date. After CYGX's termination
of EMPLOYEE under this provision, CYGX shall not be obligated to
provide the benefits to EMPLOYEE described in Section 3.4 (except as
may be required by law).
(5) EMPLOYEE may terminate his or her employment hereunder by giving
CYGX 60 days prior written notice, which termination shall be
effective on the 60th day following such notice.
8.2 Payment Upon Termination. Upon termination under paragraphs 8.1(1),
(2), (3), or (5), CYGX shall pay to EMPLOYEE within 10 days after
termination an amount equal to the sum of (1) EMPLOYEE's Base Salary
accrued to the date of termination; and (2) unreimbursed expenses
accrued to the date of termination. After any such termination, CYGX
shall not be obligated to compensate EMPLOYEE, his or her estate or
representatives except for the foregoing compensation then due and
owing, nor provide the benefits to EMPLOYEE described in Section 3.4
(except as provided by law).
8.3 Severance Provisions. The provisions of Sections 9.1 and 9.2 shall
be subject to and deemed modified by the terms of any severance
benefits granted to EMPLOYEE as provided under Section 7.
8.4 Dismissal from Premises. At CYGX's option, EMPLOYEE shall
immediately leave CYGX's premises on the date notice of termination
is given by either EMPLOYEE or CYGX.
9. Injunctive Relief. CYGX and EMPLOYEE hereby acknowledge and agree that any
default under Section 8 above will cause damage to CYGX in an amount difficult
to ascertain. Accordingly, in addition to any other relief to which CYGX may be
entitled, CYGX shall be entitled to such injunctive relief as may be ordered by
any court of competent jurisdiction including, but not limited to, an injunction
restraining any violation of Section 8 above and without the proof of actual
damages.
10. Miscellaneous.
10.1 Transfer and Assignment. This Agreement is personal as to EMPLOYEE
and shall not be assigned or transferred by EMPLOYEE without the
prior written consent of CYGX. This Agreement shall be binding upon
and inure to the benefit of all of the parties hereto and their
respective permitted heirs, personal representatives, successors and
assigns.
10.2 Severability. Nothing contained herein shall be construed to require
the commission of any act contrary to law. Should there be any
conflict between any provisions hereof and any present or future
statute, law, ordinance, regulation, or other pronouncement having
the force of law, the latter shall prevail, but the provision of
this Agreement affected thereby shall be curtailed and limited only
to the extent necessary to bring it within the requirements of the
law, and the remaining provisions of this Agreement shall remain in
full force and effect.
10.3 Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the State of Texas.
10.4 Counterparts. This Agreement may be executed in several counterparts
and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of
the parties did not sign the original or the same counterparts.
10.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter
hereof and supersedes all prior oral or written agreements,
arrangements, and understandings with respect thereto. No
representation, promise, inducement, statement or intention has been
made by any party hereto that is not embodied herein, and no party
shall be bound by or liable for any alleged representation, promise,
inducement, or statement not so set forth herein.
10.6 Modification. This Agreement may be modified, amended, superseded,
or cancelled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written
instrument executed by the party or parties to be bound by any such
modification, amendment, supersession, cancellation, or waiver.
10.7 Attorneys' Fees and Costs. In the event of any dispute arising out
of the subject matter of this Agreement, the prevailing party shall
recover, in addition to any other damages assessed, its attorneys'
fees and court costs incurred in litigating or otherwise settling or
resolving such dispute whether or not an action is brought or
prosecuted to judgment. In construing this Agreement, none of the
parties hereto shall have any term or provision construed against
such party solely by reason of such party having drafted the same.
10.8 Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this
Agreement by the other party, shall not constitute or be deemed as a
waiver of any other right under this Agreement or of any other
failure to perform under this Agreement by the other party, whether
of a similar or dissimilar nature.
10.9 Cumulative Remedies. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right
or remedy, and the exercise of any one or such rights or remedies
shall not be deemed a waiver of, or an election to exercise, any
other such right or remedy.
10.10 Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
10.11 Notices. Any notice under this Agreement must be in writing, may be
telecopied, sent by express 24-hour guaranteed courier, or
hand-delivered, or may be served by depositing the same in the
United States mail, addressed to the party to be notified,
postage-prepaid and registered or certified with a return receipt
requested. The addresses of the parties for the receipt of notice
shall be as follows:
If to CYGX: 0000 X. Xxxxxxxx, Xxxxxxx, XX 00000
If to EMPLOYEE:
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.
10.12 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall
survive the termination or expiration of this Agreement and be
binding on EMPLOYEE and CYGX.
10.13 Right of Set-Off. Upon termination or expiration of this Agreement,
CYGX shall have the right to set-off against the amounts due
EMPLOYEE hereunder the amount of any outstanding loan or advance
from CYGX to EMPLOYEE.
10.14 Effective Date. This Agreement shall become effective as of the date
set forth on page 1 when signed by EMPLOYEE and CYGX.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to
be executed as of the date first set forth above.
CYGX EMPLOYEE
_____________________________ _______ _____________________________ _______
Xxxxxxx Xxxxxxxx, President date Xxxxxxxx Xxxxxxxxxx date
JOB DESCRIPTION
Appendix A
