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EXHIBIT 10.146
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this " Agreement") is made and entered into
as of the 1st day of December, 2000, by and between BIOSHIELD TECHNOLOGIES,
INC., a Georgia corporation (hereinafter called the "Company") and XXXXXXX X.
XXXXX, Chairman and Chief Executive Officer (hereinafter called the
"Executive").
WITNESSETH:
WHEREAS, the Company and the Executive desire to enter into an
employment agreement to establish the rights and obligations of the Executive
and the Company in such employment relationship;
WHEREAS, the terms of this Agreement have been approved by the
Compensation Committee of the Board of Directors of the Company;
NOW, THEREFORE, and in consideration of the mutual covenants herein
contained, the Company and the Executive hereby mutually agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby employs the
Executive, and the Executive hereby accepts employment with the Company upon the
terms and conditions hereinafter set forth. The Executive shall serve the
Company as its Chairman and Chief Executive Officer of BioShield Technologies,
Inc. In such capacity, the Executive shall have all powers, duties, and
obligations as are normally associated with such position. The Executive shall
further perform such other duties related to the business of the Company,
including travel, as may from time to time be reasonably requested of him by the
Company's Board of Directors. The Executive shall devote all of his skills,
time, and attention solely and exclusively to said position and in furtherance
of the business and interests of the Company except for:
(a) time spent in managing his personal, financial and
legal affairs and serving on corporate, civic or charitable boards or
committees, in each case only if and to the extent not substantially interfering
with the performance of such responsibilities, and
(b) periods of vacation to which he is entitled.
Executive shall promptly notify the Company of his election or appointment to
any corporate, civic or charitable boards or committees on or after the date of
this Agreement.
2. TERM OF EMPLOYMENT. The term of employment shall begin, or be
deemed to have begun, on December 12, 2000 (the "Effective Date") and shall
expire on December 12, 2005, (the "Expiration Date") subject, however, to prior
termination or to extension, as herein provided. On each December 1st while this
Agreement is in force beginning December 12, 2001, the term of this Agreement
shall automatically be extended so that new term of the Agreement expires five
years from such date.
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3. BASE SALARY. For such services, the Executive shall receive an
annual base salary of $250,000 (the "Base Salary"), which Base Salary shall be
reviewed annually by the Compensation Committee of the Board of Directors and
which may be increased, but not decreased, by the Company during the term of
this Agreement. In the event that the Company increases the Executive's Base
Salary, the amount of the prior Base Salary, together with any increase(s),
shall be his new Base Salary. The Base Salary shall be payable in equal
installments, no less frequently than semi-monthly, in accordance with the
Company's regular payroll practices.
4. BONUS. For each fiscal year of the Company during which he is
employed by the Company on the last day of the fiscal year, the Executive shall
be eligible to receive an annual bonus (" Annual Bonus") under the bonus plan
established by the Compensation Committee of the Board for the Executive. Such
Annual Bonus shall be up to 100% of base salary, and/or up to $2,000,000 in
stock incentive plan, but in no case said bonus shall be less than 30% of base.
Each Annual Bonus shall be paid in cash or stock, as applied above, as soon as
practical after the year for which the Annual Bonus is earned or awarded, unless
electively deferred by the Executive pursuant to any deferral programs or
arrangements that the Company may make available to the Executive.
4.(a) Fund Raising. For each amount raised that the Executive
closes, he shall be entitled to a minimum of 10% commission.
4 (b) It is also acknowledged as an inducement to keep Xx. Xxxxx
on as a key executive. He is being granted options to vest immediately in the
amount of 2,000,001 at a strike price of $0.05.
5. FRINGE BENEFITS. The Company shall further provide the
Executive with all health and life insurance coverages, sick leave and
disability programs, tax-qualified retirement plans, stock option plans, paid
holidays and vacations, expense reimbursement policies, moving and relocation
policies, perquisites, and such other fringe benefits of employment as the
Company may provide from time to time to actively employed senior executives of
the Company who are similarly situated including upon termination.
Notwithstanding the preceding provisions of this Paragraph 5, during the term of
this Agreement (including extensions thereof) the Company shall provide the
Executive;
(a) reimbursement for all reasonable expenses incurred by
the Executive in connection with the conduct of the Company's business on
presentation of reasonable and appropriate receipts and in accordance with the
Company's regular reimbursement policy applicable to senior executives;
(b) an individual disability insurance policy, at the
Company's expense, in addition to the long-term disability plan maintained by
the Company generally for its employees, which provides long-term disability
insurance which replaces at least $13,000-of the Executive's monthly Base
Salary;
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(c) a minimum of six (6) weeks of paid vacation per year.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OF EMPLOYMENT OTHER THAN BY EXECUTIVE.
The Executive's employment hereunder may be terminated by the Company without
any breach of this Agreement under the following circumstances:
(1) DEATH OR DISABILITY. The Executive's
employment hereunder shall terminate upon his death, and may be terminated by
the Company in the event of his Disability for a continuous period of at least
one hundred eighty (180) days, provided that the Executive does not return to
work on a substantially full-time basis within thirty (30) days after Notice of
Termination is given by the Company pursuant to the provisions of Paragraphs 6(
c) and 6( d)(2). A return to work of less than thirty (30) days shall not
interrupt a continuous period of Disability .
(2) CAUSE. The Company may terminate the
Executive's employment hereunder for cause only in the event of a final
determination of a court of law.
(3) WITHOUT CAUSE. The Company may terminate the
Executive's employment hereunder without Cause as long as it remunerates
Executive for the full five-year term within said contract from termination
date.
(b) TERMINATION OF EMPLOYMENT BY EXECUTIVE. The Executive
may terminate his employment at any time with or without Good Reason.
(c) NOTICE OF TERMINATION. Any termination of the
Executive's employment by the Company, or by the Executive other than
termination upon the Executive's death, shall be communicated by written Notice
of Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" means a notice that shall indicate the specific termination
provision in this Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated. The failure by the
Executive to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.
(d) DATE OF TERMINATION. "Date of Termination" means:
(1) If the Executive's employment is terminated
by his death, the date of his death.
(2) If the Executive's employment is terminated
by the Company as a result of Disability pursuant to Paragraph 6(a)(I), the date
that is thirty (30) days after Notice of Termination is given; provided the
Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period.
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If the Executive terminates his employment for Good
Reason pursuant to Paragraph 6(b), the date that is ten (10) days after Notice
of Termination is given (provided that the Company does not cure such event
during the ten (10) day period).
(4) If the Executive terminates his employment
other than for Good Reason, the date that is two (2) weeks after Notice of
Termination is given; provided, in the sole discretion of the Company, such date
may be any earlier date after Notice of Termination is given.
(5) If the Executive's employment is terminated
by the Company without Cause pursuant to Section 6(a)(3), the date that is two
(2) weeks after Notice of Termination is given.
(6) If the Executive's employment is terminated
by the Company for Cause pursuant to Paragraph 6(a)(2), the date on which the
Notice of Termination is given.
7. AMOUNTS PAYABLE UPON TERMINATION OF EMPLOYMENT OR DURING
DISABILITY. Upon the termination of the Executive's employment with the Company,
the Company shall have the following obligations (including the obligation to
pay the cost of all benefits provided by the applicable benefit plan to the
Executive and the Executive's family under this Section 7, except normal
employee contributions required by the applicable benefit plan of other
participating executives with comparable responsibilities); provided, however,
that any item paid or payable under this Agreement shall be reduced by any
amount paid or payable to the Executive and the Executive's family with respect
to the same type of payment under any severance plan or policy now maintained or
at any time in the future maintained by the Company. F or this purpose, any
payment under this Agreement or any severance plan or policy made over time
shall be discounted to present value at the Interest Rate before reducing any
payment under this Agreement by any amount paid or payable to the Executive
under such severance plan or policy.
(a) DEATH. If the Executive's employment is terminated by
his death, the Executive's beneficiary (as designated by the Executive in
writing with the Company prior to his death) shall be entitled to payment of all
Accrued Obligations. Unless otherwise directed by the Executive all Accrued
Obligations shall be paid to the Executive's beneficiaries in a lump sum in cash
within thirty (30) days of the Date of Termination. In the absence of a
beneficiary designation by the Executive, or, if the Executive's designated
beneficiary does not survive the Executive, benefits described in this Paragraph
7(a) shall be paid to the Executive's heirs. In addition, all stock options that
have been granted to the Executive at least six months prior to the date of his
death (measured from the date of grant of each such stock option), if any, shall
be and become fully vested and may be executed by the estate of the Executive
for a period equal to the earlier to occur of five (5) years from the date of
the death of the Executive or the date the option would have otherwise expired
without regard to the Executive's death or other termination of employment. If
the Executive dies after the date of grant of any stock options, the Executive's
estate may exercise any stock options which were then vested for a period equal
to the earlier to occur of five (5) years from the date of the death of the
Executive or the date the option would have expired without regard to the
Executive's death or other termination of employment.
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(b) DISABILITY.
(1) During any period that the Executive fails
to perform his duties hereunder as a result of incapacity due to physical or
mental illness ("Disability Period"), the Executive shall continue to receive
his base salary at the rate then in effect for such period until his employment
is terminated pursuant to Paragraph 6(a)(I); provided, however, that payments of
Base Salary so made to the Executive shall be reduced by the sum of the amounts,
if any, that were payable to the Executive at or before the time of any such
salary payment under any disability benefit plan or plans of the Company and
that were not previously applied to reduce any payment of Base Salary.
(2) Upon his termination of employment because
of Disability (as described in Paragraph 6(a)(I)), the Executive shall be
entitled to the payments and benefits described in Paragraph 7(a) as if the
Executive had died on his Date of Termination. In the event of the Executive's
death prior to the time that all payments described in Paragraph 7(a) have been
completed, such payments and benefits shall be paid to the Executive's
beneficiary (as designated pursuant to Paragraph 7(a)), or, in the absence of a
beneficiary designation of the designated beneficiary does not survive the
Executive, to the Executive's estate.
(3) The Executive and the Executive's family
shall be entitled to receive disability and other welfare plan benefits (other
than continued group long-term disability coverage) generally available to
executives with comparable responsibilities or positions for a period of two (2)
years from the Date of Termination at the same cost to the Executive as is
charged to such executives from time to time for comparable coverage.
(c) TERMINATION BY COMPANY WITHOUT CAUSE OR TERMINATION
BY EXECUTIVE FOR GOOD REASON. In the event that the Company terminates the
Executive's employment without Cause or the Executive terminates his employment
for Good Reason before the expiration of the term of this Agreement, including
any extension thereof, the Executive shall be entitled to the following payments
and benefits:
(1) Those described in Paragraph 7(a) as if the
Executive had died on his Date of Termination.
(2) Payment of an amount equal to the sum of the
Executive's Base Salary (assuming no increases) payable to the Executive for
remaining term of this Agreement, which shall be not be less than five years
assuming no termination, plus (B) two (2) times the average of the Annual
Bonuses and Salary paid or payable to the Executive during the term of this
Agreement, payable in twelve (12) equal, consecutive monthly installments
commencing no later than thirty (30) days after the Date of Termination.
(3) All outstanding options, stock grants, share
of restricted stock or any other equity, incentive compensation shall be and
become fully vested and nonforfeitable.
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(4) The Executive and the Executive's family
shall be entitled to receive welfare plan benefits (other than continued group
long-term disability coverage) generally available to executives with comparable
responsibilities or positions for a period of the lessor of five (5) years from
the Date of Termination or until the Expiration Date of this Agreement at the
same cost to the Executive as is charged to such executives from time to time
for comparable coverage.
8. RESTRICTIVE COVENANTS. The Executive agrees that, during the
term of this Agreement, including an extension thereof, and for a period of one
year thereafter, he shall not, directly or indirectly:
(a) on Executive's own behalf or on behalf of any other
person or entity, solicit, contact, call upon, communicate with, or attempt to
communicate with any person or entity who was a customer of the Company at any
time within the one-year period ending on the Date of Termination or any
representative of any such customer of the Company, with the intent or purpose
of selling or providing of any product or service competitive with any product
or service sold or provided or under development by the Company during the
period of one year immediately preceding termination of Executive's employment
and which is still being offered by or is still under development by the
Company; and
(b) employ or attempt to employ or assist anyone else in
employing in any Competing Business any person who, at any time within the
period commencing one year prior to the Date of Termination and ending one year
after the Date of Termination, was, is or shall be an employee of the Company
(whether or not such employment is full-time or is pursuant to a written
contract with the Company).
9. CONFIDENTIAL INFORMATION. The Executive agrees that:
(a) during the term of this Agreement and, with respect
to Confidential Information, for a period of five (5) years following his Date
of Termination, or with respect to Trade Secrets, for so long as the respective
information qualifies as a trade secret under applicable law, he will receive
and hold all Company Information in trust and in strictest confidence;
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(b) he will use his best effort to protect the Company
Information from disclosure and will in no event take any action causing any
Company Information to lose its character as Company Information; and
(c) except as required by Executive's duties in the
course of employment by the Company, he will not, directly or indirectly, use,
publish, disseminate or otherwise disclose any Company Information to any third
party without the prior written consent of the Company, which may be withheld in
the Company's absolute discretion.
All documents tangible or intangible materials, including computer data,
provided to or obtained by Executive during the course of employment by the
Company which contains Company Information are the property of the Company
(collectively, the "Materials"). Executive will not remove from the Company's
premises or copy or reproduce any Materials (except as Executive's employment by
the Company shall require), and at the termination of Executive's employment,
regardless of the reason for such termination, Executive will leave with the
Company, or immediately return to the Company, all Materials or copies or
reproductions thereof in Executive's possession, power or control.
10. ACKNOWLEDGMENT; REMEDIES.
(a) Executive has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred to the
Company under Sections 8 and 9 of this Agreement, and hereby acknowledges and
agrees that the same are reasonable in time, necessary to protect the business,
interests and properties of the Company, are designed to eliminate competition
which would be unfair to the Company, do not stifle the inherent skill and
experience of Executive, would not operate as a bar to Executive's sole means of
support, are fully required to protect the legitimate interests of the Company
and do not confer a benefit upon the Company disproportionate to the detriment
of Executive.
(b) In the event of any violation of the provisions of
Sections 8 or 9 of this Agreement by Executive, the parties hereby recognize and
acknowledge that remedy at law will be inadequate and the Company may suffer
irreparable injury. Accordingly, Executive consents to injunctive and other
appropriate equitable relief upon the institution of proceedings therefore by
the Company in order to protect the Company's rights under such Sections. Such
relief shall be in addition to any other relief to which the Company may be
entitled at law or in equity. Covenants contained in Sections 8 or 9 hereof
shall be treated the same as a termination by the Company for Cause and shall
entitle the Company to cease the provision of any welfare plan benefits being
afforded to the Executive or his family after the termination of his employment
with the Company, cease any payments to be made to the Executive pursuant to
this Agreement in connection with such termination (other than accrued and
unpaid Base Salary and vacation) or recover from the Executive any payments made
to the Executive under this Agreement in respect of such termination (other than
accrued Base Salary and vacation). In no event shall such actions preclude the
Company from any equitable relief to which it may otherwise be entitled and such
remedies shall be cumulative.
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11. CERTAIN FURTHER PAYMENTS BY THE COMPANY.
(a) Tax Reimbursement Payment. In the event that any
amount or benefit paid or distributed to the Executive by the Company or any
Affiliated Company, whether pursuant to this Agreement or otherwise
(collectively, the "Covered Payments"), is or becomes subject to the tax (the
"Excise Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed, the Company shall pay to the Executive, at the time
specified in Section 11 ( e) below, the Tax Reimbursement Payment (as defined
below). The Tax Reimbursement Payment is deferred as an amount, which when added
to the Covered Payments and reduced by any Excise Tax on the Covered Payments
and any federal, state and local income tax and Excise Tax on the Tax
Reimbursement Payment provided for by this Agreement (but without reduction for
any federal, state or local income or employment tax on such Covered Payments),
shall be equal to the sum of (i) the amount of the Covered Payments, and (ii) an
amount equal to the product of any deductions disallowed for federal, state or
local income tax purposes because of the inclusion of the Tax Reimbursement
Payment in the Executive's adjusted gross income and the highest applicable
marginal rate of federal, state or local income taxation, respectively, for the
calendar year in which the Tax Reimbursement Payment is to be made.
(b) DETERMINING EXCISE TAX. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax and the
amount of such Excise Tax,
(1) such Covered Payments will be treated as
"parachute payments" within the meaning of Section 280G of the Code, and all
"parachute payments" in excess of the "base amount" (as defined under Section
280G{b)(3) of the Code) shall be treated as subject to the Excise Tax, unless,
and except to the extent that, in the opinion of the Company's independent
certified public accountants, which, in the case of Covered Payments made after
the Change of Control Date, shall be the Company's independent certified public
accountants appointed prior to the Change of Control Date, or tax counsel
selected by such accountants (the " Accountants"), such Covered Payments (in
whole or in part) either do not constitute "parachute payments" or represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G{b)(4) of the Code) in excess of the "base amount", or such
"parachute payments" are otherwise not subject to such Excise Tax, and
(2) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code.
(c) APPLICABLE TAX RATES AND DEDUCTIONS. For purposes of
determining the amount of the Tax Reimbursement Payment, the Executive shall be
deemed:
(1) to pay federal income taxes at the highest
applicable marginal rate of federal income taxation for the calendar year in
which the Tax Reimbursement Payment is to be made,
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(2) to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for the calendar year
in which the Tax Reimbursement Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from the deduction of
such. state or local taxes if paid in such year (determined without regard to
limitations on deductions based upon the amount of the Executive's adjusted
gross income), and
(3) to have otherwise allowable deductions for
federal, state and local income tax purposes at least equal to those disallowed
because of the inclusion of the Tax Reimbursement Payment in the Executive's
adjusted gross income.
(d) SUBSEQUENT EVENTS. In the event that the Excise Tax
is subsequently determined by the Accountants to be less than the amount taken
into account hereunder in calculating the Tax Reimbursement Payment made, the
Executive shall repay to the Company, at the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of such prior Tax
Reimbursement Payment that has been paid to the Executive or to federal, state
or local tax authorities on the Executive's behalf and that would not have been
paid if such Excise Tax had been applied in initially calculating such Tax
Reimbursement Payment, plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in
the event any portion of the Tax Reimbursement Payment to be refunded to the
Company has been paid to any federal, state or local tax authority , repayment
thereof shall not be required until actual refund or credit of such portion has
been made to the Executive, and interest payable to the Company shall not exceed
interest received or credited to the Executive by such tax authority for the
period it held such portion. The Executive and the Company shall mutually agree
upon the course of action to be pursued (and the method of allocating the
expenses thereof) if the Executive's good faith claim for refund or credit is
denied. In the event that the Excise Tax is later determined by the Accountants
to exceed the amount taken into account hereunder at the time the Tax
Reimbursement Payment is made (including, but not limited to, by reason of any
payment the existence or amount of which cannot be determined at the time of the
Tax Reimbursement Payment), the Company shall make an additional Tax
Reimbursement Payment in respect of such excess (which Tax Reimbursement Payment
shall include any interest or penalty payable with respect to such excess) at
the time that the amount of such excess is finally determined.
(e) DATE OF PAYMENT. The portion of the Tax Reimbursement
Payment attributable to a Covered Payment - be paid to the Executive within ten
business days following the payment of the Covered Payment. If the amount of
such Tax Reimbursement Payment (or portion thereof) cannot be finally determined
on or before the date on which payment is due, the Company shall pay to the
Executive an amount estimated in good faith by the Accountants to be the minimum
amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (which Tax Reimbursement Payment shall include interest at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount of the
estimated Tax Reimbursement Payment exceeds the amount subsequently determined
to have been due, such excess shall be repaid or refunded pursuant to the
provisions of Section 11 (d) above.
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12. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its Affiliated Companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive
may have under any other agreements with the Company or any Affiliated
Companies, including, but not limited to stock option or restricted stock
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any
Affiliated Companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
13. NOTICE OF TERMINATION FOR GOOD CAUSE. In the event that the
Executive shall in good faith give a Notice of Termination for Good Reason and
it shall thereafter be determined that Good Reason did not take place, the
employment of the Executive shall, unless the Company and the Executive shall
otherwise mutually agree, be deemed to have terminated, at the date of giving
such purported Notice of Termination, by mutual consent of the Company and the
Executive and, except as provided in the last preceding sentence, the Executive
shall be entitled to receive only those payments and benefits which he would
have been entitled to receive at such date had he terminated his employment
voluntarily at such date under this Agreement.
14. DEFINITIONS.
(a) "Accountants" shall have the meaning set forth in
Section ll (b).
(b) "Accrued Obligations" shall mean (i) the Executive's
full Base Salary through the Date of Termination, (ii) the product of the Annual
Bonus paid to the Executive for the last full fiscal year of the Company and a
fraction, the numerator of which is the number of days in the current fiscal
year of the Company through the Date of Termination, and the denominator of
which is 365, (iii) any compensation previously deferred by the Executive
(together with any accrued earnings thereon) and not yet paid by the Company and
any accrued vacation pay for the current year not yet paid by the Company, (iv)
any amounts or benefits owing to the Executive or to the Executive's
beneficiaries under the then applicable employee benefit plans or policies of
the Company and (v) any amounts owing to the Executive for reimbursement of
expenses properly incurred by the Executive prior to the Date of Termination and
which are reimbursable in accordance with the reimbursement policy of the
Company described in Section 5(a).
(c) "Affiliated Company" shall mean any company
controlling, controlled by or under common control with the Company.
(d) "Annual Bonus" shall have the meaning set forth in
Section 4.
(e) "Base Salary" shall have the meaning set forth in
Section 3.
(f) "Board" shall mean the Board of Directors of the
Company.
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(g) "Cause" shall mean either:
(1) any. act that constitutes, on the part of
the Executive, (A) fraud, dishonesty, or a felony and (B) that directly results
in material injury to the Company; as proven in a court ruling.
(2) the Executive otherwise materially breaches
this Agreement; provided, however, that in the case of Clause (2) or (3) above,
such conduct shall not constitute Cause unless the Board shall have delivered to
the Executive notice setting forth with specificity (A) the conduct deemed to
qualify as Cause, (B) reasonable action that would remedy such objection, and
(C) a reasonable time (not less than thirty (30) days) within which the
Executive may take such remedial action, and the Executive shall not have taken
such specified remedial action within such specified reasonable time.
(h) A "Change of Control" means:
(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the corporation where such acquisition
causes such person to own thirty-five percent (35%) or more of the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this Subsection (A), the
following acquisitions shall not be deemed to result in a Change of Control: (i)
any acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of Subsection (3) below; and provided further,
that if any Person's beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds thirty-five percent (35%) as a result of a
transaction described in clause (i) or (ii) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the Company,
such subsequent acquisition shall be treated as an acquisition that causes such
Person to own thirty-five percent (35%) or more of the Outstanding Company
Voting Securities; or
(2) individuals who as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect
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to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(3) the approval by the shareholders of the
Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company ("Business
Combination ") or, if consummation of such Business Combination is subject, at
the time of such approval by shareholders, to the consent of any government or
governmental agency, the obtaining of such consent (either explicitly or
implicitly by consummation); excluding, however, such a Business Combination
pursuant to which (i) all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation that as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Voting Securities, (ii) no Person (excluding any employee benefit plan
(or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, thirty-five
percent (35%) or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(4) approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, no Change of Control shall be deemed to have
occurred for purposes of this Agreement by reason of any actions or events in
which the Executive participates in a capacity other than in his capacity as
executive (or as a director of the Company or a Subsidiary, where applicable).
(i) "Change of Control Date" shall mean the date on which
a Change of Control shall be deemed to have occurred.
(j) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(k) "Company Information" means Confidential Information
and Trade Secrets.
(i) "Competing Business" means any business engaging in
the exploitation or development of antimicrobial products.
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(m) "Confidential Information" means confidential data
and confidential information relating to the business of the Company (which does
not rise to the status of a trade secret under applicable law) which is or has
been disclosed to Executive or of which Executive became aware as a consequence
of or through his employment with the Company and which has value to the Company
and is not generally known to its competitors and which is designated by the
Company as confidential. Confidential Information shall not include any data or
information that (i) has been voluntarily disclosed to the general public by the
Company, (ii) has been independently developed and disclosed to the general
public by others, or (iii) otherwise enters the public domain through lawful
means.
(n) "Date of Termination" shall have the meaning set
forth in Section 6(d).
(o) "Disability" shall mean disability which would
entitle the Executive to receive full long-term disability benefits under the
Company's long-term disability plan on term substantially similar to those of
the long-term disability plan as in effect on the date of this Agreement.
(p) "Excise Tax" shall have the meaning as set forth in
Section 11(a).
(q) "Good Reason" shall mean the occurrence of one of the
following events (provided the Company does not cure such event on a retroactive
basis to the extent possible within thirty days following its receipt of the
Executive's Notice of Termination):
(1) The Executive's title is changed in a
materially adverse manner.
(2) The Executive's base salary is reduced for
any reason other than in connection with the termination of his employment.
(3) For any reason other than in connection with
the termination of the Executive's employment, the Company materially reduces
any fringe benefit provided to the Executive under Section 5 below the level of
such fringe benefit provided generally other actively employed similarly
situated executives of the Company. Notwithstanding the foregoing, if the
Company agrees to fully compensate the Executive for any such material reduction
for a period ending on the earlier to. occur of (i) the date such fringe benefit
is no longer provided to other actively employed similarly situated executives
of the Company or (ii) four (4) years, then such event shall not constitute Good
Reason.
(4) A change of over fifty (50) miles in the
Executive's principal place of employment in Atlanta, Georgia.
(5) The Company otherwise materially breaches,
or is unable to perform its obligations under this Agreement.
(6) The occurrence of a Change of Control.
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Notwithstanding the foregoing, the occurrence of one of the event in Paragraphs
(1) through (6) hereof shall not be considered Good Reason for the Executive's
termination, unless the Executive delivers a Notice of Termination-pursuant to
Paragraphs 6(c) and 6(d)(3) hereof, within one hundred eighty (180) days after
the Executive has actual notice of the occurrence of any of the events listed in
Paragraphs (1) through (6) hereof.
(r) "Interest Rate" shall mean the interest rate
payable on one year Treasury Bills in effect on the day that is 30 business days
(days other than Saturday, Sunday or legal holidays in the City of New York)
prior to the Date of Termination.
(s) "Notice of Termination" shall have the
meaning as set forth in Section 6(c).
(t) "Subsidiary" shall mean any majority owned
subsidiary of the Company.
(u) "Tax Reimbursement Payment" shall have the
meaning set forth in Section 11(a).
(v) "Trade Secrets" means information of the
Company, without regard to form, including, but not limited to, technical or
non-technical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product or service plans or lists of actual or potential customers or suppliers
which is not commonly known by or available to the public and which information
(I) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use; and (2) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
15. ASSIGNMENTS AND SURVIVORSHIP OF BENEFITS. The rights and
obligations of the Company under this Agreement shall inure to the benefit of,
and shall be binding upon, the successors and assigns of the Company. If the
Company shall at any time be merged or consolidated into, or with, any other
company, or if substantially all of the assets of the Company are transferred to
another company, then the provisions of this Agreement shall be binding upon and
inure to the benefit of the company resulting from such merger or consolidation
or to which such assets have been transferred, and this provision shall apply in
the event of any subsequent merger, consolidation, or transfer.
16. NOTICES. Any notice given to either party to this Agreement
shall be in writing, and shall be deemed to have been given when delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
duly addressed to the party concerned, at the address indicated below or to such
changed address as such party may subsequently give notice of:
If to the Company: BioShield Technologies, Inc.
0000 Xxxxxxxxxxxxx Xxxx..
Xxxxx X000
Xxxxxxxx, Xxxxxxx 00000
Attn: Board of Directors
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with a copy to: Xxxx Xxxx Xxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N .E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
If to the Executive: Xxxxxxx X. Xxxxx
000 Xxxxx Xxxxx Xxxxx, X. X.
Xxxxxxx, Xxxxxxx 00000
17. INDEMNIFICATION. The Executive shall be indemnified by the
Company, to the extent provided in the case of officers under the Company's
Articles of Incorporation or Bylaws, to the maximum extent permitted under
applicable law.
18. TAXES. Anything in this Agreement to the contrary
notwithstanding, all payments required to be made hereunder by the Company to
the Executive shall be subject to withholding of such amounts relating to taxes
as the Company may reasonably determine that it should withhold pursuant to any
applicable law or regulations. In lieu of withholding such amounts, in whole or
in part, however, the Company may, in its sole discretion, accept other
provision for payment of taxes, provided that is satisfied that all requirements
of the law affecting its responsibilities to withhold such taxes have been
satisfied.
19. ENFORCEMENT OF RIGHTS. All legal and other fees and expenses,
including, without limitation, any arbitration expenses, incurred by the
Executive in connection with seeking to obtain or enforce any right or benefit
provided for in this Agreement, or in otherwise pursuing any right or claim,
shall be paid by the Company, to the extent permitted by law, provided that the
Executive is successful in whole or in part as to such claims as the result of
litigation, arbitration, or settlement. In the event that the Company refuses or
otherwise fails to make a payment when due and it is ultimately decided that the
Executive is entitled to such payment, such payment shall increased to reflect
an interest equivalent for the period of delay, compounded annually, equal to
four (4) percentage points over the Interest Rate in effect as of the date the
payment was first due.
20. GOVERNING LAW/CAPTIONS/SEVERANCE. This Agreement shall be
construed in accordance with, and pursuant to, the laws of the State of Georgia.
The captions of this Agreement shall not be part of the provisions hereof, and
shall have no force or effect. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. Except as otherwise specifically provided
in this paragraph, the failure of either party to insist in any instance on the
strict performance of any provision of this Agreement or to exercise any right
hereunder shall not constitute a waiver of such provision or right in any other
instance. The parties hereto consent to the jurisdiction of the state and
federal courts of the State of Georgia located in Xxxxxx County, Georgia, with
respect to any action arising or relating to this Agreement and said courts of
the State of Georgia shall have sole and exclusive jurisdiction with respect to
any such action or related action.
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21. ENTIRE AGREEMENT/AMENDMENT. This instrument contains the
entire agreement of the parties relating to the subject matter hereof, and the
parties have made no agreement, representations, or warranties relating to the
subject matter of this Agreement that are not set forth herein. This Agreement
may be amended at any time by written agreement of both parties, but it shall
not be amended by oral agreement.
IN WITNESSETH WHEREOF, the parties have executed this Agreement on the
date first above written.
BIOSHIELD TECHNOLOGIES, INC.
----------------------------------
Name
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
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