Exhibit 10.(c)(iii)
PERMANENT EMPLOYMENT AGREEMENT
This Permanent Employment Agreement ("Agreement") is made as of the 18th
day of December, 1996, between NeuroCorp., Ltd. and Memory Centers of America,
Inc. ("Companies"), and Xxxxxxxx X. Xxxxx, an individual residing at 0000
Xxxxxx, Xxxxxx, XX ("Employee").
RECITALS
1. The Companies wish to secure the permanent uninterrupted services of
Employee as Chief Executive Officer, President and Director of Memory Centers of
America, Inc. and as Executive Vice President and Director of NeuroCorp., Ltd.,
and all of its subsidiaries and Employee wishes to perform such services for
Companies on the terms and conditions hereinafter set forth and for the duration
of this Permanent Employment Agreement.
2. Accordingly, the Companies and Employee wish to execute this Permanent
Employment Agreement.
AGREEMENT
1. Definitions. As used in this Agreement, the terms identified below
shall have the meanings indicated, and variants and derivatives of the following
terms shall have correlative meanings.
"Board" means the Board of Directors of each Company.
"Confidential Information" means, with respect to the affairs of the
Companies, any information, data, figures, sales figures, projections,
estimates, customer lists, tax records, personnel history, accounting
procedures, promotions, manuals, procedures, and any writings or conversations
concerning the foregoing.
"Continuation Date" means January, 2000.
"Disability" means a physical or mental incapacity which is incurred by
Employee and which would allow Employee to receive benefits under the Company's
long-term disability income plan.
"Effective Date" means January 6, 1997.
"Incapacity" means incapacity due to physical or mental illness (other
than an incapacity which constitutes a Disability), as a result of which
Employee has been receiving payments under the Company's long-term disability
income plan.
"MCA" shall mean Memory Centers of America, Inc.
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"NCL" shall mean NeuroCorp, Ltd.
"Person" means any person (other than Employee), firm, corporation,
partnership, joint venture, or other entity or an affiliated group including any
Person (other than Employee).
2. Permanent Employment. The Companies hereby agree to permanently employ
Employee as Chief Executive Officer, President and Director of Memory Centers of
America, Inc. and as Executive Vice President and Director of NeuroCorp., Ltd.
and all of its subsidiaries. Employee shall devote full time and attention
(during normal business hours) exclusively to the performance of his duties
hereunder. Employee will perform his duties faithfully, competently, diligently,
and to the best of his ability.
3. Term. The term of this Agreement shall commence on the Effective Date
and continue to the same date in 2000. Following the Continuation Date, this
Agreement shall continue for successive one-year term unless the Companies
provide Employee with written notice of intent to terminate at least 12 months
prior to the end of the initial three-year term or a subsequent term, or unless
terminated pursuant to Section 6. In each successive continuation year of this
Agreement, compensation shall be guaranteed according to Section 4 below, with
salary to increase annually by an amount consistent with CPI as compared to the
prior year. Employee's performance under this Agreement is conditional upon the
Companies raising $2,000,000 prior to the Effective Date.
4. Compensation. As full compensation for the permanent services of
Employee, Companies shall provide Employee with the following salary and
benefits:
a. Base Salary. Base salary, at the annual rate of $150,000 in the
first year. Thereafter, base salary shall be $225,000 in year two and shall
increase as set forth in Paragraph 3 above. Payments shall be made in bi-weekly
installments.
b. Incentive compensation bonus. Employee shall be entitled to
receive an incentive compensation bonus during the term of this agreement
pursuant to an annual executive incentive plan to be developed by the Companies.
c. Expenses. Reimbursement for necessary and reasonable business
expenses incurred by Employee in his employment including, but not limited to,
all expenses attendant to Employee's travel to and from the Companies' current
corporate offices in Tarrytown, New York.
d. Fringe Benefits. Participation in all employee benefit plans and
arrangements commensurate with Employee's
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position and length of service which are presently or hereafter made generally
available to key employees of the Companies. Employee shall have an auto lease
allowance of $800 per month.
e. Options. 500,000 qualified stock options for purchase of common
stock exercisable at the lower of $7.00 per share or fair market value. Said
options shall: be exercisable, upon vesting, for a period of 10 years from the
Effective Date of this Agreement; be protected against dilution in a manner
consistent with the provisions of stock options under the Company's stock option
plan; vest 200,000 options upon the Effective Date, and 150,000 options on each
of the first and second anniversaries of the Effective Date, so that they are
fully vested 24 months after the Effective Date.
5. Termination. This Agreement and Companies' unaccrued obligations
hereunder shall terminate as follows:
a. Death. Upon death of Employee.
b. Incapacity. If, as a result of Employee's incapacity due to
physical or mental illness, Employee shall be absent from his duties hereunder
for six (6) consecutive months, and if, within 30 days after written notice of
the Companies' intention to terminate this Agreement-time basis, Companies may
terminate this Agreement for "Incapacity."
c. For Cause. "Cause" means (i) the willful and continued failure by
Employee to substantially perform his duties hereunder; (ii) any willful,
intentional, or grossly negligent act by Employee having the demonstrable effect
of substantially injuring the reputation or business of the Company; or (iii)
conviction of Employee of any crime which constitutes a felony. No act, or
failure to act, on Employee's part shall be considered "willful" unless done, or
not done, by Employee not in good faith and without reasonable belief that the
act or omission was in the best interest of the Companies. Notwithstanding the
foregoing, Employee shall not be deemed to have been terminated for cause unless
and until the Companies shall have delivered to Employee a copy of a resolution
duly adopted by the affirmative vote of not less than sixty percent of the
entire Board (which sixty percent must include at least one-half of the
independent outside directors) at a meeting of the Board called and held for the
purpose (after reasonable notice to Employee and an opportunity for Employee,
together with counsel selected by Employee, to be heard before the Board),
finding that in the good faith opinion of the Board Employee engaged in the
conduct set forth above in clauses (i), (ii), and (iii) in the first sentence of
this subsection and specifying the particulars thereof in detail.
d. Notice by Employee. Upon three months written notice by Employee
to Companies.
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6. Compensation upon Termination or During Incapacity. During any period
that Employee fails to perform his duties as a result of Incapacity, Companies
shall continue to pay base salary (and Employee shall be entitled to all other
benefits and provisions under this Agreement) at the rate in effect at the
commencement of such Incapacity until this Agreement is terminated pursuant to
Section 5(b); provided, however, that the obligations of Companies under this
Section 6 shall be reduced by the amount of any disability income insurance
payments or workers compensation payments Employee may receive during Incapacity
under any state plan or policy carried by Companies of which Employee is a
beneficiary. Upon termination of employment under this section, this Agreement
shall terminate and Companies shall have no further obligation to Employee
except to the extent Employee is otherwise entitled to any accrued payments or
benefits hereunder or under any benefit plan or program of Companies.
7. Indemnification. The Companies shall indemnify Employee, to the maximum
extent permitted by applicable law, during and after the termination of his
employment, against all judgments, settlement payments, costs, attorney fees,
and other reasonable expenses incurred by you in connection with the defense of
any action, suit, or proceeding, arising from events before or during the term
of his employment to which he has been made a party because of the performance
of his duties under this agreement. This right of indemnification shall be in
addition to any rights that he may otherwise be entitled to under the bylaws of
the Companies or otherwise, but shall exclude acts of willful misconduct or
gross negligence by Employee, upon such finding in a final judgment by a court
of competent jurisdiction.
8. Cooperation With Employer. Following any termination of this Agreement,
Employee shall fully cooperate with Companies in all matters relating to
theansfer of any such pending work to other employees of Companies as may be
designated by Companies.
9. Intellectual Property Rights. All right, title and interest of every
kind and nature whatsoever, whether now known or unknown, in and to any
intellectual property, including any inventions, patents, trademarks,
copyrights, films, scripts, ideas, plans, creations and properties invented,
created, written, developed, furnished, produced or disclosed by Employee, in
the course of rendering Employee's services to Companies under this Agreement
shall, as between the parties hereto, be and remain the sole and exclusive
property of Companies for any and all purposes and uses whatsoever, and Employee
shall have no right, title or interest of any kind or nature therein or thereof,
or in and to any results and proceeds therefrom.
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10. Companies Location. It is the specific understanding of the parties
hereto that as consideration and inducement to Employee to enter into this
Agreement, Companies have agreed that the national administrative office of MC
Inc. may be located within the general metropolitan area of Lansing, Michigan at
Employee's discretion. It is the intent of the parties that for the first three
months of this Agreement, Employee expects to work Monday through Thursday at
NCL headquarters and for the second three months of this Agreement, Employee
expects to divide his work time as circumstances require and permit between NCL
headquarters and Lansing, Michigan.
11. Return of Property. Upon termination of this Agreement, regardless of
how termination may be effected, Employee or his estate shall immediately turn
over to Companies all of Companies' property, including all items used by
Employee in rendering services hereunder or otherwise, which may be in
Employee's possession or under his control.
12. Governing Law. This Agreement is made and entered into in the State of
New York, and the laws of New York shall govern its validity and interpretation
and the performance by the parties hereto of their respective duties and
obligations hereunder.
13. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by both parties.
14. Notices. Any notice, request, demand or other communication hereunder
shall be in writing and shall be deemed to be duly given when personally
delivered to an officer of Companies or to Employee, as the case may be, or when
delivered by certified mail (return receipt requested) at the following address:
TO COMPANIES: TO EMPLOYEE:
Xx. Xxxxx Itil Xxxxxxxx X. Xxxxx
Chairman of the Board 2556 Xxxxxx
NeuroCorp., Ltd. and Xxxxxx, Xxxxxxxx 00000
Memory Centers of America, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
15. Section Headings. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
16. Attorney Fees. In the event of any litigation arising out of this
Agreement, the non-prevailing party will pay the expenses of the prevailing
party, including, without limitation, reasonable attorney fees.
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17. Partial Invalidation. Should any valid federal or state law or final
determination of any administrative agency or court of competent jurisdiction
affect any provision of this Agreement, the provision or provisions so affected
shall be automatically conformed to the law or determination and otherwise this
Agreement shall continue in full force and effect.
18. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns (including successive, as well as
immediate, successors and assigns) of the Companies. The obligations of this
Agreement may not, however, be transferred by the Companies without the consent
of Employee, and subject to the following sentence. If the Companies transfer to
any other Person substantially all of its business and assets by merger,
consolidation, sale of assets or otherwise, the Companies must transfer its
obligations hereunder to such other Person and such other Person must accept
such transfer and assume the obligations of the Companies imposed hereby.
Companies shall notify the Employee in writing within the thirty (30) day period
following any transfer of business and assets that the transferee has accepted
the transfer and assumption of the Companies' obligations under this Agreement.
This Agreement shall inure to the benefit of and be binding upon the heirs and
assigns (including successive, as well as immediate, assigns) of Employee. The
rights of Employee under this Agreement may be assigned only to his personal
representative or by Will or pursuant to applicable laws of descent and
distribution. If Employee should die while any amount would still be payable to
Employee under this Agreement if Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with this
Agreement to Employee's personal representative or by Will or pursuant to
applicable laws of descent and distribution.
19. Non-Compete: In the event of termination of this Agreement pursuant to
Section 5, above, Employee will not, for a period of one year from the effective
date of such termination, engage, directly or indirectly, in any capacity
(whether as officer, director, stockholder, partner, associate, employee,
consultant, owner or otherwise) or have an interest in, or be associated with
any business in competition with Memory Centers of America, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed to be effective as of the Effective Date.
WITNESSES: NEUROCORP., LTD.
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
-------------------------------- -------------------------------
Its:______________________________
0
XXXXXX XXXXXXX XX XXXXXXX, INC.
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
-------------------------------- -------------------------------
Its:______________________________
/s/ [ILLEGIBLE] /s/ Xxxxxxxx X. Xxxxx
-------------------------------- ----------------------------------
Xxxxxxxx X. Xxxxx
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