EMPLOYMENT AGREEMENT
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Exhibit 10.8
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AGREEMENT dated as of the 5th
day of November, 2007, by and among Pharma-Bio Serv, Inc., a Delaware
corporation with its principal office at Street 1 Xxx 00, Xxxxxx Xxxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxx, Xxxxxx Xxxx (“PHARMA-BIO” or “PBSV”), Plaza Consulting
Group, a Puerto Rico corporation with its principal office at Street 1 Xxx 00,
Xxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxx, Xxxxxx Xxxx (both hereinafter “the
Company”), and Xxxxx X. Xxxxxxx, residing at Country Club Development, 000
Xxxxxxxxx Xx., Xxx Xxxxxxx, Xxxxxx Xxxx (“Executive”).
WITNESSETH:
WHEREAS, the Company has
engaged Executive as Vice President-Finance & Administration and Chief
Financial Officer (“CFO”) of the Company and desires to obtain the benefits of
Executive’s knowledge, skill and ability in connection with management and
administration of all aspects of the Company’s financial accounting, reporting,
controls and public securities and to employ Executive on the terms and
conditions hereinafter set forth; and
WHEREAS, the Company desires
to engage Executive to serve at its Vice President-Finance & Administration
and CFO on and subject to the terms of this Agreement;
NOW, THEREFORE, in
consideration of the mutual promises set forth in this Agreement, the
parties agree as follows:
1. Employment and
Duties
(a) Subject
to the terms and conditions hereinafter set forth, Pharma-Bio or the Company
hereby employ Executive as Vice President-Finance & Administration and CFO
during the Employment Term, as hereinafter defined. As Vice
President-Finance & Administration and CFO of PHARMA-BIO or the Company, or
any of its subsidiaries, Executive shall have the duties and responsibilities
including but not limited to the following: (i) preparing all
monthly, quarterly and annual financial statements; (ii) preparing and providing
with the assistance of the Company’s accounting staff, the financial information
required to comply with the filing requirements of all local, state and federal
regulatory agencies, commissions or departments; (iii) developing and
implementing proper internal accounting controls and procedures throughout the
Company and such controls shall be consistent with Sarbanes Oxley; (iv)
preparing monthly, quarterly and annual budgets consistent with the Company
business plan; (v) managing and administration of all aspects of the Company’s
public securities; books and records; transfers; etc.; (vi) Executive shall
report to PHARMA-BIO’s President and CEO (“President and CEO”) and to PBS’ audit
committee of the Board of Directors (the “Audit Committee”); and (vii) Executive
shall also perform such other duties and responsibilities as may be determined
by the President & CEO and the Audit Committee.
(b) The
“Term” shall mean the period commencing on November 1st, 2007
(employment beginning date), and ending one (1) year from employment beginning
date, unless terminated earlier pursuant to Section 5 of this
Agreement. The Term may be extended subject to the approval of the
President & CEO, the Executive, and Audit Committee.
2. Executive’s
Performance - Executive hereby accepts the employment
contemplated by this Agreement. During the Term, Executive shall perform his
duties diligently, in good faith and in a manner consistent with the best
interests of Pharma-Bio or the Company, and, during the Employment Term, he
shall devote substantially all of his business time to the performance of his
duties under this Agreement.
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3. Compensation and Other
Benefits
(a) For
his services during the Employment Term, the Company shall pay Executive a
salary (“Salary”) at the annual rate of $100,000.00. Salary shall be
payable in such installments as the Company regularly pays its executive
officers, but not less frequently than semi-monthly.
(b) In
addition to Salary, Executive shall receive the following benefits during the
Employment Term:
(i) Monthly Car
Allowance of $500.00;
(ii) Such insurance,
including major medical health insurance and life insurance, as the Company
provides its executive officers, which benefits will not be less than the
insurance benefits provided by PHARMA-BIO or the Company to its executive
officers.
(iii) Vacation paid
days per Pharma Serv’s Vacation Policy;
(iv) Sick leave
accrual as per Company policy;
(v) Eligibility to
participate in such pension and other benefit plans that are available to
executive officers of the Company or PHARMA-BIO;
(vi) Payment of
continued education seminars that the Executive considers would be relevant for
his professional development and for the best interest of the Company, as well
as to comply with the continued education requirements of the Puerto Rico State
Board of Accountants and the American Institute of Certified Public Accountants.
The Company will compensate the Executive for the time required to attend such
seminars; and
(vii) Annual bonus
based on performance metrics established and agreed upon by the Company’s senior
management. Benefit is based on a successful achievement of
Executive’s performance goals, and for this purpose, performance appraisal will
take place once a year.
4. Reimbursement of
Expenses - The Company shall reimburse Executive, upon presentation of
proper expense statements, for all authorized, ordinary and necessary
out-of-pocket expenses reasonably incurred by Executive during the Term in
connection with the performance of his services pursuant to this Agreement in
accordance with the Company’s expense reimbursement policy.
5. Termination of
Employment
(a) This
Agreement and Executive’s employment hereunder shall terminate immediately upon
his death.
(b) This
Agreement and Executive’s employment pursuant to this Agreement may be
terminated by the Executive or PHARMA-BIO or the Company on not less than 30
days’ written notice in the event of Executive’s Disability. The term
“Disability” shall mean any illness, disability or incapacity of the Executive
which prevents his from substantially performing his regular duties for a period
of two consecutive months or three months, even though not consecutive, in any
twelve month period.
(c) The
Company may terminate this Agreement and Executive’s employment pursuant to this
Agreement immediately for Cause, in which event no further compensation
shall be payable to Executive subsequent to the date of such termination. The
date of termination shall be the date of the notice from PHARMA-BIO or the
Company stating that Executive’s employment is terminated for
Cause. The term “Cause” shall mean:
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(i) repeated failure
of Executive to perform material instructions from the Board, or, from the
officer to whom Executive reports, provided that such instructions are
reasonable and consistent with Executive’s duties as set forth in Section 1 of
this Agreement, or any other failure or refusal by Executive to perform his
duties required by said Section; provided, however, that Executive shall have
received notice from the Board specifying the nature of such failure in
reasonable detail and Executive shall have failed to cure the failure within
five business days after receipt of such notice.
(ii) a breach of
Sections 6, 7 or 8 of this Agreement;
(iii) a breach of
trust whereby Executive obtains personal gain or benefit at the expense of or to
the detriment of PHARMA-BIO or the Company or any of its
affiliates;
(iv) any fraudulent
or dishonest conduct by Executive or any other conduct by Executive which
damages PHARMA-BIO, the Company or any of its affiliates or their property,
business or reputation.
(v) a conviction of,
or guilty plea or plea of nolo contendere by, of Executive of (x) any felony or
(y) any other crime involving fraud, theft, embezzlement or use or possession of
illegal substances; or
(vi) the admission by
Executive of any matters set forth in Section 5(c)(v) of this
Agreement.
(d) Executive’s
resignation prior to the expiration of the Term shall be treated in the same
manner as a termination for Cause.
(e) In
the event that the Company and PHARMA-BIO terminate this Agreement and
Executive’s employment other than for reasons set forth in Sections 5(a), 5(b)
or 5(c):
(i) The Company shall
pay to Executive within 30 days after the date of his termination an amount
equal to Salary for the corresponding working period, if any, of the
Term;
(ii) The restrictions
set forth in Section 7(a) of this Agreement shall terminate
immediately.
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6. Trade Secrets and
Proprietary Information
(a) Executive
recognizes and acknowledges that the Company, through the expenditure of
considerable time and money, has developed and will continue to develop in the
future information concerning customers, clients, marketing, products, services,
business, research and development activities and operational methods of the
Company and its customers or clients, contracts, financial or other data,
technical data or any other confidential or proprietary information possessed,
owned or used by the Company, the disclosure of which could or does have a
material adverse effect on the Company, its businesses, any business in which it
proposes to engage, its operations, financial condition or prospects and that
the same are confidential and proprietary and considered “confidential
information” of the Company for the purposes of
this Agreement. In consideration of his employment during
the Term, Executive agrees that he will not, during or after the Term, without
the consent of the Board make any disclosure of confidential information to any
person, partnership, corporation or entity either during or after the Term,
except that nothing in this Agreement shall be construed to prohibit Executive
from using or disclosing (a) if such disclosure is necessary in the normal
course of the Company’s business in accordance with policies or instructions or
authorization from the Board, (b) Executive can demonstrate that such
information shall have (i) become public knowledge other than by or as a result
of disclosure by a person not having a right to make such disclosure, (ii) been
developed by Executive independent of any of the Company’s confidential or
proprietary information or (iii) been disclosed to Executive by a person not
subject to a confidentiality agreement with or other obligation of
confidentiality to the Company.
(b) In
the event that any confidential information is required to be produced by
Executive pursuant to legal process, Executive shall give the Company notice of
such legal process within a reasonable time, but not later than ten business
days prior to the date such disclosure is to be made, unless Executive has
received less notice, in which event Executive shall immediately notify the
Company. The Company shall have the right to object to any such
disclosure, and if the Company objects (at the Company’s cost and expense) in a
timely manner so that Executive is not subject to penalties for failure to make
such disclosure, Executive shall not make any disclosure until there has been a
court determination on the Company’s objections. If disclosure is
required by a court order, final beyond right of review, or if the Company does
not object to the disclosure, Executive shall make disclosure only to the extent
that disclosure is required by the court order, and Executive will exercise
reasonable efforts at the Company’s expense, to obtain reliable assurance that
confidential treatment will be accorded the Confidential
Information.
(c) Executive
shall, upon expiration or termination of the Term, or earlier at the request of
the Company, turn over to the Company or destroy all documents, papers, computer
disks or other material in Executive’s possession or under Executive’s control
which may contain or be derived from confidential information. To the
extent that any confidential information is on Executive’s hard drive or other
storage media, he shall, upon the request of the Company, cause either such
information to be erased from his computer disks and all other storage media or
otherwise take reasonable steps to maintain the confidential nature of the
material.
(d) Executive
further realizes that any trading in PHARMA-BIO’s common stock or other
securities or aiding or assisting others in trading in PHARMA-BIO’s common stock
or other securities, including disclosing any non-public information concerning
PHARMA-BIO or the Company to a person who uses such information in trading in
PHARMA-BIO’s common stock or other securities, constitutes a violation of
federal and state securities laws. Executive will not engage in any
transactions involving PHARMA-BIO’s common stock or other securities while in
the possession of material non-public information.
(e) For
the purposes of Sections 6, 7, 8 and 9 of this Agreement, the term
“Company” shall include PHARMA-BIO and Plaza Consulting Group, their
subsidiaries and affiliates.
7. Covenant Not To Solicit or
Compete
(a) During
the period from the date of this Agreement until one (1) year following the date
on which Executive’s employment is terminated, Executive will not, directly or
indirectly:
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(i) persuade or
attempt to persuade any person or entity which is or was a customer, client or
supplier of the Company to cease doing business with the Company, or to reduce the amount of
business it does with the Company (the terms “customer” and “client” as used in
this Section 7 to include any potential customer or client to
whom the Company submitted bids or proposals, or with whom the Company conducted
negotiations, during the term of Executive’s employment hereunder or during the
two (2) years preceding the termination of his employment);
(ii) persuade or
attempt to persuade any employee of the Company, or any individual who was an
employee of the Company during the one (1) year period prior to the lawful and
proper termination of this Agreement, to leave the Company’s employment, or to
become employed by any person or entity other than the Company; or
(iii) engage in any
business in the United States whether as an officer, director, consultant,
partner, guarantor, principal, agent, employee, advisor or in any manner, which
directly competes with the business of the Company as it is engaged in at the
time of the termination of this Agreement, unless, at the time of such
termination or thereafter during the period that the Executive is bound by the
provisions of this Section 7, the Company ceases to be engaged in such activity,
provided, however, that nothing in this Section 7 shall be construed to
prohibit the Executive from owning an interest of not more than five (5%)
percent of any public Company engaged in such activities.
(b) Executive
will not, during or after the Term, make any disparaging statements concerning
the Company, its business, officers, directors and employees that could injure,
impair, damage or otherwise affect the relationship between the Company, on the
one hand, and any of the Company’s employees, suppliers, customers, clients or
any other person with which the Company has or may conduct business or otherwise
have a business relationship of any kind and description. The Company
will not make any disparaging statements concerning Executive; provided,
however, that this sentence shall not be construed to prohibit the Company from
giving factual information concerning Executive in response to inquiries that
the Company believes are bona fide.
(c) The
Executive acknowledges that the restrictive covenants (the “Restrictive
Covenants”) contained in Sections 6 and 7 of this Agreement are a condition
of his employment are reasonable and valid in geographical and temporal scope
and in all other respects. If any court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is invalid or
unenforceable, the remainder of the Restrictive Covenants and parts thereof
shall not thereby be affected and shall remain in full force and effect, without
regard to the invalid portion. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable because
of the geographic or temporal scope of such provision, such court shall have the
power to reduce the geographic or temporal scope of such provision, as the case
may be, and, in its reduced form, such provision shall then be
enforceable.
8. Inventions and
Discoveries - Executive agrees promptly to disclose in writing to the
Company any invention, design, system, process, development or other discovery
or intellectual property (collectively, “inventions and discoveries”) conceived,
created or made by his during the Term, whether created or developed by himself
or with others, whether during or after working hours, in any business in which
the Company is then engaged or which otherwise relates to any product or service
dealt in by the Company and such inventions and discoveries shall be the
Company’s sole property, regardless of whether such inventions and discoveries
are otherwise treated as work performed for hire and regardless of whether such
inventions and discoveries are or can be patented, registered or copyrighted.
Upon the Company’s request, Executive shall execute and assign to the Company
all applications for copyrights, trademarks and letters patent of the United
States and such foreign countries as the Company may designate, and Executive
shall execute and deliver to the Company such other instruments as the Company
deems necessary to vest in the Company the sole ownership of all rights, title
and interest in and to such inventions and discoveries, as well as all
copyrights and/or patents. Executive shall also give the Company all assistance
it may reasonably require, including the giving of testimony in any suit,
action, investigation or other proceeding in connection with the
foregoing.
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9. Injunctive Relief -
Executive agrees that his violation or threatened violation of any of the
provisions of Sections 6, 7 or 8 of this Agreement shall cause immediate
and irreparable harm to the Company. In the event of any breach or threatened
breach of any of said provisions, Executive consents to the entry of preliminary
and permanent injunctions by a court of competent jurisdiction prohibiting
Executive from any violation or threatened violation of such provisions and
compelling Executive to comply with such provisions. This Section 9 shall
not affect or limit, and the injunctive relief provided in this Section 9
shall be in addition to, any other remedies available to the Company at law or
in equity or in arbitration for any such violation by Executive. In the event an
injunction is issued against any such violation by Executive, the period
referred to in Section 7 of this Agreement shall continue until the later
of the expiration of the period set forth therein or one (1) month from the date
a final judgment enforcing such provisions is entered and the time for appeal
has lapsed. Subject to Section 7(c) of this Agreement, the provisions
of Sections 6, 7, 8 and 9 of this Agreement shall survive any termination of
this Agreement and Executive’s employment.
10. Indemnification –
Pharma-Bio or the Company shall provide Executive with payment of legal fees and
indemnification to the maximum extent permitted by the Company’s certificate of
incorporation, by-laws and applicable law.
11. Representations by the
Parties.
(a) Executive
represents, warrants, covenants and agrees that he has a right to enter into
this Agreement, that he is not a party to any agreement or
understanding, oral or written, which would prohibit performance of his
obligations under this Agreement, and that he will not use in the
performance of his obligations hereunder any proprietary information of any
other party which he is legally prohibited from using.
(b) The
Company represents, warrants and agrees that it has full power and authority to
execute and deliver this Agreement and perform its obligations
hereunder.
12. Miscellaneous.
(a) Any
notice, consent or communication required under the provisions of this Agreement
shall be given in writing and sent or delivered by hand, overnight courier or
messenger service, against a signed receipt or acknowledgment of receipt, or by
registered or certified mail, return receipt requested, or telecopy or similar
means of communication if receipt is acknowledged or if transmission is
confirmed by mail as provided in this Section 12(b), to the parties at
their respective addresses set forth at the beginning of this Agreement or by
telecopy to PHARMA-BIO at the Company fax at (000) 000-0000, or to Executive at
available numbers, with notice to PHARMA-BIO to the attention of the individual
who executed this Agreement on its behalf. Any party may, by like notice, change
the person, address or fax number to which notice is to be sent.
(b) This
Agreement shall in all respects be construed and interpreted in accordance with,
and the rights of the parties shall be governed by, the laws of the Commonwealth
of Puerto Rico applicable to contracts executed and to be performed wholly
within such State, without regard to principles of conflicts of laws except that
the provisions of Section 10, as it relates to PHARMA-BIO, shall be
governed by the Delaware General Corporation law.
(c) Except
for actions, suits, or proceedings taken pursuant to or under Section 6, 7, 8 or
9 of this Agreement, any dispute concerning this Agreement or the rights of the
parties hereunder shall be submitted arbitrator, then each party shall designate
one arbitrator and the two arbitrators shall select a third
arbitrator. The award of the arbitrator shall be final, binding and
conclusive on all parties, and judgment on such award may be entered in any
court having jurisdiction. The arbitrator shall have the power, in his or his
discretion, to award counsel fees and costs to the prevailing party. The
arbitrator shall have no power to modify or amend any specific provision of this
Agreement except as expressly provided in Section 12(f) of this
Agreement.
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(d) Notwithstanding
the provisions of Section 12(c) of this Agreement, with respect to any
claim for injunctive relief or other equitable remedy pursuant to Section 9
of this Agreement or any claim to enforce an arbitration award or to compel
arbitration, the parties hereby (i) consents to the exclusive jurisdiction
of the United States District Court for the District of Puerto Rico and the
Puerto Rico courts located in San Xxxx, Puerto Rico, (ii) agree that any
process in any action commenced in such court under this Agreement may be served
upon it or his personally, either (x) by certified or registered mail, return
receipt requested, or by Federal Express or other courier service which obtains
evidence of delivery, with the same full force and effect as if personally
served upon such party in San Xxxx, Puerto Rico, or (y) by any other method of
service permitted by law, and (iii) waives any claim that the jurisdiction
of any such court is not a convenient forum for any such action and any defense
of lack of in personam jurisdiction with respect
thereof. If an action may be commenced pursuant to
this Section 12(d), the complaint may, notwithstanding Section 12(c)
of this Agreement, include other claims against the other party, even if such
claims would otherwise be subject to arbitration pursuant to said Section
12(c).
(e) If
any term, covenant or condition of this Agreement or the application thereof to
any party or circumstance shall, to any extent, be determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such term,
covenant or condition to parties or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant or condition of this Agreement shall be valid and be enforced to
the fullest extent permitted by law, and any court or arbitrator having
jurisdiction may reduce the scope of any provision of this Agreement, including
the geographic and temporal restrictions set forth in Section 7 of this
Agreement, so that it complies with applicable law.
(f) This
Agreement constitute the entire agreement of the Company and Executive as to the
subject matter hereof, superseding all prior or contemporaneous written or oral
understandings or agreements, including any and all previous employment
agreements or understandings, all of which are hereby terminated, with respect
to the subject matter covered in this Agreement. This Agreement may
not be modified or amended, nor may any right be waived, except by a writing
which expressly refers to this Agreement, states that it is intended to be a
modification, amendment or waiver and is signed by both parties in the case of a
modification or amendment or by the party granting the waiver. No
course of conduct or dealing between the parties and no custom or trade usage
shall be relied upon to vary the terms of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
(g) No
party shall have the right to assign or transfer any of his rights hereunder
except that PHARMA-BIO’s and the Company’s rights and obligations may be
assigned in connection with a merger of consolidation of PHARMA-BIO or the
Company or a sale by PHARMA-BIO or the Company of all or substantially all of
its business and assets.
(h) This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors, executors, administrators and permitted
assigns.
(i) The
headings in this Agreement are for convenience of reference only and shall not
affect in any way the construction or interpretation of this
Agreement.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.
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By:
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/s/ Xxxxxxxxx Plaza
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| Name: Xxxxxxxxx Plaza | |
| Title: President & CEO | |
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EXECUTIVE:
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/s/ Xxxxx X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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